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TMI Blog2012 (6) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 194C is applicable in such contracts - Decided in favor of assessee. - IT Appeal NoS. 112 and 113 (Asr.) OF 2011 - - - Dated:- 7-5-2012 - H.S. Sidhu, B.P. Jain, JJ. Laxman Singh for the Appellant. Joginder Singh for the Respondent. ORDER 1. These two appeals of the Revenue arise from the consolidated order of the CIT(A, Jammu, dated 27.01.2011 for the assessment years 2008-09 2009-10 respectively. 2. The Revenue in both the appeals has raised following common grounds of appeals, which are as under: "1. That the ld. CIT(A) has erred in holding the payment treated as payments for technical services by the AO u/s 194J as payments for Annual Maintenance Contract covered u/s 194C. 2. That the Ld. CIT(A) has erred in allowing the relief on the basis of Circular No.715 as Annual Maintenance Contractors in the case are entirely for technical services. 3. That the ld. CIT(A) has erred in allowing the relief by relying on the case of M/s. Eastern Typewriters Services vs. State of A.P.(42 STC 18) which involve Annual Maintenance Contract of Typewriters whereas the present case the contract is for sophisticated machines like ST SCAN R.O. System etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ypewriters Services vs. State of A.P. 42 STC 18 where it was held that when an assessee entered into a contract with the government department for repairing and serving typewriter and other equipments at periodical intervals and at certain specified rates, the same was work contract'. In all the contracts mentioned in question here the equipment were run by assessee but the repairs and maintenance, were done by contractors which though required a certain expertise yet the contract cannot be termed as a contract for providing 'technical services'. The limited 'technical' expertise, which is required in almost all types of work was merely used to facilitate the routine maintenance work and not for providing 'technical services' as such. In view of the above, I hold that the contracts under discussion were covered under work or service contracts and the circular 715 was clearly applicable, hence there was no short deduction of taxes and the demand so created in respect of them (expect two contracts of running the equipment as discussed above) was not at all enforceable and assessee is not to be treated in default." 4. The Ld. CIT (DR) Sh. Laxman Singh argued and invited our at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Ld. Counsel for the assessee relied upon the submissions made before the Ld. CIT(A), Circular of the Board and the agreements placed on record, relied upon the decision of the CIT(A) and prayed to confirm the order of the ld. CIT(A). 6. We have heard the rival contentions and perused the facts of the case. As regards the appeal of the assessee in ITA No.112(Asr)/2011, the ld. Counsel for the assessee invited our attention, at the outset, that the demand in the financial year 2007-08 relating to assessment year 2008-09 is Rs.2,64,390/- only and therefore, in view of Instruction No.3 of 2011 [ F.No.279/MISC.142/2007-ITJ] dated 9th Feb.,2011, the department is prohibited to file the appeal having tax effect which does not exceed Rs.3,00,000/- before the Tribunal. This was objected by the Ld. DR and relied upon the same Instruction of CBDT on which the ld. Counsel for the assessee relied upon. The Ld. DR invited our attention to para 5 of the said Instruction, where the tax effect in the composite order of any High Court or appellate authority has to be taken into consideration even if the tax effect is less than the prescribed monetary limits in respect of one assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section; ( b ) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; 6.3 As per section 9(1)(vii) - Explanation (2) - the technical services have been defined as under: Explanation [2] - For the purposes of this clause, "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". 6.4 As per said Explanation in section 9(1), the fees for technical services means any consideration for the rendering of any managerial, technical or consultancy services including the provision of services of technical or other personnel, is a part ..... 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