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TMI Blog2016 (5) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal of the assessee is against the revision order of CIT under section 263 of the Act. For this the assessee has raised the following two effective grounds: - "1. On the facts and in the circumstances of the case and law, the applicable thereto, learned CIT erred in holding that assessment order u/s 143(3) dated 06-03-2013 is erroneous and prejudicial to the interest of the revenue without appreciating the fact that the Ld. AO has considered the issue, therefore, order passed u/s 263 of the Act is liable to be quashed. 2. On the facts and circumstances of the case, the learned CIT erred in setting aside the order passed u/s 143(3) dated 06-03-2013 with the direction to the AO to make assessment afresh after proper verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2012 the assessee has deducted TDS and paid before the due dates and also filed details before the AO. Accordingly to the assessee, the AO framed assessment after considering all the facts and if at this stage this issue would be raised it will tantamount to change in opinion, but the CIT was of the view that the assessee has not deducted TDS on reimbursement and there is shortfall of TDS in respect of payments to Noida Software Technologies Park Ltd. amounting to Rs. 45 lakhs and hence the assessment frames by the AO is erroneous and prejudicial to the interest of Revenue. Hence, he wrongly directed the AO to make fresh assessment after proper verification of facts and law applicable for tax deduction at source on these two payments. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reimbursement of actual expenditure without any profit element, it is not covered under section 194C of the Act. With respect to another issue of shortfall in deduction of TDS as pointed out by the CIT in respect of payment of Rs. 45 lakhs to Noida Software Technology Park Ltd. for technical and professional services, the assessee has deducted tax @ 2% as per provisions of section 194C of the Act and this payment does not fall under section 194J of the Act and this is merely a shortfall of payment and the issue is covered by the decision of the Hon'ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal (2014) 361 ITR 432 (Cal). In view of the above argument learned counsel of the assessee stated that the assessment order framed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar No. 715 dated 08.08.1995 wherein CBDT, vide question No. 30 answered the proposition as under: - "Q.30: Whether the deduction of tax at source u/s 194C and 194J has to be made out of the gross amount of the bill including reimbursement or excluding reimbursement for actual expenses? Ans: Section 194C and 194J refer to any sum paid. Obviously, reimbursement cannot be deducted out of the total amount for the purpose of tax deduction at source." 8. In view of these facts and the Board Circular No. 715 and payment made by the assessee of Rs. 21,31,25,582/- to NCL by way of reimbursement of actual expenditure incurred by NCL on payment of bank guarantee commission is merely a reimbursement. In the light of the above, we are of the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the second issue of short deduction of TDS on the payment made by the assessee to Noida Software Technology Park Ltd. of an amount of Rs. 45 lakhs for technical and professional services, for which assessee has deducted tax @2% instead of @ 10% to be deducted under section 194J of the Act as held by CIT in his revision order. We find that the payment made to Noida Software Technology Park Ltd. is as per the agreement entered into between the assessee and the said party, the assessee has obtained services only for uplinking of two channels owned by assessee on satellite involving no technical services and hence the same is covered under section 194C of the Act and there is no shortfall in tax to be deducted. In this regard the issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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