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TMI Blog2010 (12) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the assessee - ITA Nos. 14496 and 4497/Del./2010 - - - Dated:- 10-12-2010 - A.D. Jain, K.D. Ranjan, JJ. O.P. Sapra, Adv., for the Appellant Ravi Rama Chandran, Sr. DR, for the Respondent ORDER A.D. Jain: These are department's appeals for AYs 2009-10 and 10-11, raising the following common grounds of appeal: "1.1 The CIT(A) has erred on facts and in law in holding that order dated 30.12.2009 u/s 201/201(1A) of the I.T. Act, 1961 passed by the ITO (TDS), Meerut is erroneous to the extent that the TDS on payment made for repairing of transformer was deductible only with reference to labour charges excluding the value of material used by the contractee for carrying out the repairing of transforme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying of product. 2. As per the assessment order, a verification was conducted on 16.9.2009 in the assessee's case, to verify the different provisions of TDS as to whether TDS deductible was being deducted and was paid to the Government Account in time in accordance with the provisions of the Income-tax Act. From the details submitted by the assessee, the ITO (TDS) found that the tax had been deducted only on the labour charges without including the material used by the contractee. The assessee was asked to show cause as to why the material used in the repair of transformers be not charged to tax along with labour charges. The assessee submitted that in respect of a composite work contract, deduction u/s 194C of the Act would have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made for repair of transformer was deductible only with reference to labour charges excluding the value of material used by the contractee for carrying out the repair of the transformer; that the CIT(A) has overlooked the fact that there was one consolidated contract for repair of transformer and there was no separate contract for supply of material; that the CIT(A) has erred in relying on the decision of the Hon'ble Supreme High Court in the case of "Gannon Dunkerley and Co. (Madras) Ltd. (1958) AIR 560; that the CIT(A) has erred in not considering that the tax is deductible at source on the gross amount of payment without excluding the cost of material or reimbursement of expenses incurred by the contractee, as clarified in CBDT circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in fact did receive any technical services, attracting the provisions of section 194J of the Act to the payment of repair charges. CBDT Circular no.295 dated 06.03.1981, on which the AO had placed reliance, is not applicable. That Circular was with regard to the material issued by the cotractee for civil contract. In the assessee's case, however, material had been used by the contractors of their own. The value thereof was specifically mentioned in the contract for repair charges. Therefore, it cannot be said that "Gannon Dunkerley and Co.(Madras) Ltd." (supra) is not applicable. Undisputedly, the contract had 4 different components including the supply of material. Hence, the CIT(A) was correct in holding that TDS was liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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