Principal Commissioner Of Income Tax, Jaipur-Ii ,Jaipur v. M/S. Jaipur Vidyut Vitran Nigam Limited, Janpath, Jyoti Nagar, Pan-Aabcj6373K

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 67 / 2015 PRINCIPAL COMMISSIONER OF INCOME TAX, JAIPUR-II ,JAIPUR ----Appellant Versus M/S. JAIPUR VIDYUT VITRAN NIGAM LIMITED, JANPATH, JYOTI NAGAR, PAN- ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. Mathur For Respondent(s) : Mr. Gunjan Pathak _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 12/09/2017 1.By way of this this appeal, the appellant has challengedthe judgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department confirming the order ofCIT(A). 2.This Court while admitting the appeal on 21.09.2015framed following substantial questions of law: “1.Whether on the facts and in the circumstances ofthe case and in law the ITAT has erred in deletingaddition of Rs.1,09,018/- made depositing theemployee’s contribution to PF and ESI beyond theprescribed time limit provided in the respective Acts.2.Whether on the facts and in the circumstances ofthe case and in law the ITAT has erred in holdingthat payment of Rs.2,81,23,73,125/- on account oftransmission/wheeling/SLDC charges to RRVPN werenot for technical services liable for making TDSunder section 194J of the I.T. Act as such provisionsof Section 40 (a)(ia) are not applicable. 3. Whether on the facts and in the circumstances of the case and in law the ITAT has erred in deletingthe addition of Rs.1,73,07,800/- on account of frontend fees paid in HIDSCO for raising the loan holdingit to be revenue expenditure? 3.Learned counsel for the respondent contended that theissues No.1 and 2 are covered by decision of this Court passed on 19.10.2016, in D.B. Income Tax Appeal No.422/2011Commissioner of Income Tax vs. Principal Officer JVVNL whereinthe Division Bench while considering the matter observed as under:- “Counsel for the appellant relied on the provisionsof Section 194C and 194J which reads as under:- 194C (1) Any person responsible for paying anysum to any resident (hereafter in this sectionreferred to as the contractor) for carrying out anywork (including supply of lobour for carrying outany work) in pursuance of a contract between thecontractor and a specified person shall at the timeof credit of such sum to the account of thecontractor or at the time of payment thereof in cashor by issue of a cheque or graft or by any othermode, whichever is earlier, deduct an amount equalto- (I) One per cent where the payment is being madeor credit is being given to an individual or a Hinduundivided family; (ii) two per cent where the payment is being madeor credit is being given to a person other than anindividual or a Hindu undivided family, of such sum as income-tax on income comprisedtherein. (2) Where any sum referred to in sub-section (1) iscredited to any account, whether called “Suspenseaccount” or by any other name, in the books ofaccount of the person liable to pay such income,such crediting shall be deemed to be credit of suchincome to the account of the payee and theprovisions of this section shall apply accordingly. (3) Where any sum is paid or credited for carryingout any work mentioned in sub-clause (e) of clause(iv) of the Explanation, tax shall be deducted atsource- (I) on the invoice value excluding the value ofmaterial, if such value is mentioned separately inthe invoice; or (ii) on the whole of the invoice value, if the value ofmaterial is not mentioned separately in the invoice. (4) No individual or Hindu undivided family shall beliable to deduct income-tax on the sum credited orpaid to the accountof the contractor where suchsum is credited or paid exclusively for personalpurposes of such individual or any member of Hinduundivided family. (3) Where any sum is paid or credited for carryingout any work mentioned in sub-clause (e) of clause(iv) of the Explanation, tax shall be deducted atsource- (I) on the invoice value excluding the value ofmaterial, if such value is mentioned separately inthe invoice; or (ii) on the whole of the invoice value, if the value ofmaterial is not mentioned separately in the invoice. (4) No individual or Hindu undivided family shall beliable to deduct income-tax on the sum credited orpaid to the accountof the contractor where suchsum is credited or paid exclusively for personalpurposes of such individual or any member of Hinduundivided family. (5) No deduction shall be made from the amount ofany sum credited or paid or likely to be credited orpaid to the account of, or to, the contractor, if suchsum does not exceed [thirty] thousand rupees 194J. (1) Any person, not being an individual or aHindu undivided family, who is responsible forpaying to a resident any sum by way of- (a) fees for professional services, or (b) fees for technical services, [or] [(ba) any remuneration or fees or commission bywhatever name called, other than those on whichtax is deductible under section 192, to a director ofa company, or] (c) royalty, or (d) any sum referred to in clause (va) of section28,] shall, at the time of credit of such sum to theaccount of the payee or at the time of paymentthereof in cash or by issue of a cheque or draft orby any other mode, whichever is earlier, deduct anamount equal to [ten] percent of such sum asincome-tax on income comprised therein.” 3. The assessee was bound to deduct TDS in lieu ofservices received by them and for the services receivedby them was liable to pay tax within the meaning ofExplanation 2 to Section 9(1) (vii) of the Act. 4. However counsel for the respondent Mr. Jhanwarcontended that the issue is concluded in view of thefollowing decisions: 1. Commission of Income Tax Vs. Bharti Cellular Ltd.(2011) 330 ITR 239 (SC), 2. Union of India Vs. Satish Panalal Shah (2001) 249ITR 221 (SC), 3. Commissioner of Income Tax Vs. Jaipur Vidyut VitranNigam Ltd. D.B. ITA No. 579/2009, High Court ofJudicature for Rajasthan, Jaipur 4. Commissioner of Income Tax Vs Bharti Cellular Ltd(2009) 319 ITR 139 (Del.) 5. Skycell communications Ltd. And Anr. Vs DeputyCommissioner of Income Tax and Ors. (2001) 251 ITR53 (MAD.) 6. M.S. Jewellery Vs. Assistant Commissioner(ASSESSMENT) Agricultural Income Tax and Sales 7. CIT vs. Maharashtra State Electricity Distribution Co. Ltd., (2015) 119 DTR (BOM) 278, 8. Commissioner of Income Tax-II and Ors. Vs DelhiTransport Ltd. Manu/DE/2199/2015.”Transport Ltd. Manu/DE/2199/2015.” 4.Learned counsel further relied upon decision in D.B. Income Tax Appeal No.278/2011 Commissioner of Income Tax,Jaipur-II, Jaipur vs. Jaipur Vidyut Vitran Nigam Ltd. Decided byDivision Bench of this Court on 06.01.2014 wherein the issue wasdecided in favour of the assessee and against the department. 5.Regarding third issue the Tribunal in para 14 observed reads as under :- “We have heard the rival contentions of both theparties and perusal the material available onrecord. The assessee has raised loan of Rs.300crores for improvement in transmission, networkand infrastructure. The assessee paid this amountto HUDCO, which was pre-decided condition on theloan sanctioned. The learned CIT DR has notcontroverted the findings by the learned CIT(A) inhis order. Further the laws relied upon by the ARfor the assessee are squarely applicable on it beingidentical issue, therefore we uphold the order ofthe learned CIT(A).” 6.Taking into consideration the above we are of theopinion that the view taken by the Tribunal is just and proper. Nointerference is called for. 7.All the issues are decided in favour of the assessee andagainst the department. 8. However, it is made clear that issue No.1 will besubject to SLP. 9.The appeal stands disposed of in the above terms. 6.Taking into consideration the above we are of theopinion that the view taken by the Tribunal is just and proper. Nointerference is called for. 7.All the issues are decided in favour of the assessee andagainst the department. 8. However, it is made clear that issue No.1 will besubject to SLP. 9.The appeal stands disposed of in the above terms. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Chouhan/80