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TMI Blog2013 (9) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding technical services. Interest charged by the DCIT (TDS) u/s. 201(1a) - Held that:- Demand u/s. 201(1) cannot be raised in view of the fact that the amount in question has been offered for tax by the payee but in respect of the interest it is held that the assessee will be liable to pay interest up to the completion of the assessment for the A.Y. 2008-09 in the case of deductee. The Ld. CIT(A) directed the Assessing Officer to delete the addition u/s. 201(1) of the Income-tax Act and compute interest u/s. 201(1A) of the Income-tax Act from the date of payment/credit till the date of completion of the assessment in the case of deductee for the A.Y. 2008-09. We find that in the case of Hindustan Coca Cola Beverage (P) Ltd. (2007 (8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2006 for establishment of an Insulin Manufacturing unit at Pune on Turnkey basis. The Assessing Officer has noted that M/s. Biopharmax India Pvt. Ltd., is in the field of establishing Insulin Manufacturing unit on a Turnkey basis and has the experience, knowledge and expertise in the construction and engineering of Biopharmaceuticals. The assessee company i.e. Scigen Biopharmax Pvt. Ltd. was earlier known as Shreya Biotech and had started the construction of the Insulin Manufacturing facility at Pune. In the year 2008 the company was taken over by Scigen Biopharmax Pvt. Ltd. whereas the original agreement was signed in 2006, an Addendum to the agreement was signed on 19-05-2008 between Scigen and Biopharmax India Pvt. Ltd., (in short Bioph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty of the assessee and could be used by the assessee company in any other construction. The Assessing Officer has examined the contents / terms of the Agreement and Addendum and has observed that M/s. Biopharmax has provided technical services to M/s. Scigen Biopharmax Pvt. Ltd., (the assessee) and he has noted that the tax has been deducted u/s. 194J. The assessee company i.e. Scigen has deducted the tax u/s. 194C of the Act instead of u/s.194J. He has noted that the said fact came to the light when the Central Excise Department had conducted a Survey in the case of M/s. Biopharmax and detected that M/s. Biopharmax had not paid Service Tax on the advances received from the assessee company. The statements of two of the persons concerned w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is made by assessee company were for providing technical services and hence the provisions of Sec. 194J are applicable and not Sec. 194C. 6. The Assessing Officer held that there was a short deduction of tax to the extent of 3.366% and he, therefore, passed the order u/s. 201(1) and 201(1A) of the Income-tax Act dated 02-12-2012 determining the amount payable by the assessee towards the short deduction of tax at ₹ 15,66,369/- and also levied the interest at ₹ 8,06,680/- and determined the total amount payable at ₹ 23,73,049/-. The assessee challenged the order passed by the Assessing Officer u/s. 201(1) and 201(1A) of the Income-tax Act before the Ld. CIT(A). The assessee contended before the Ld. CIT(A) that the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that M/s. BPIPL was providing technical services to the appellant company. It is also important to note that the statement of these two employees were recorded on 15/02/2008 and 19/02/2008 which were prior to signing of Addendum to the agreement which was 19/05/2008. Therefore, the statements of these two employees were recorded on the basis of original agreement itself. Therefore, on totality of facts, it is clear that the appellant company had wrongly deducted TDS U/S.194C instead of 194] of the IT. Act. Therefore, the action of the DCIT(TDS) in treating the payment being covered u/s. 194J is justified and no interference is required. Accordingly, ground Nos. l 2 are dismissed. Now the assessee is in appeal before us. 7. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pervising of the erection of the plant. Addendum is a continuation of the original agreement itself and hence, it relate back to the original contract. In our opinion, there is no merit in the argument taken by the assessee that the agreement with M/s. Biopharmax is in the nature of the works contract for setting up the Insulin Manufacturing Unit when in fact as rightly held by the DCIT (TDS) that the agreement is for providing technical services. We, accordingly confirmed the order of the Ld. CIT(A) on this issue and dismiss the Ground No. 1. 8. So far as Ground No. 2 is concerned it is in respect of interest charged by the DCIT (TDS) u/s. 201(1a) of the Act. It was contended by the assesse that M/s. Biopharmax has filed their Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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