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TMI Blog2010 (6) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... see paid effluent treatment charges of ₹ 14,98,081/- to VWEMCL without deducting tax at source on the amount so paid. 4. During the course of the assessment proceedings, the Assessing Officer called upon the assessee to explain as to why tax was not deducted as per provisions of section 194C. In response thereto, it was contended on behalf of the assessee-company that in order to invoke the provisions of section 194C of the Act, it should be shown that there is a contract between the assessee and the other party, whereas, in the instant case, VWEMCL is not a contractor. The said company was incorporated pursuant to the suggestion of the Hon'ble Gujarat High Court for the waste and effluent treatment of the effluents and wastes discharged by the factories within the limits of Vapi Industrial Estate and it was running and maintaining a Central Effluent Treatment Plant. Since it became mandatory for every factory to follow the suggestion of Hon'ble Gujarat High Court, jointly a company was floated by name VWEMCL and every factory has to discharge their effluents in the Central Effluent Treatment Plant run by the new company in which partners, nominees, directors of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be construed in an abstract and general sense and meaning of the said expression should be understood in the setting in which it was used in the relevant provision. By applying the rule of 'nosci tur a sociis' expression 'Technical Services' having being used in the company of the words 'managerial' and 'consultancy'-both of which involve a human element-the word 'technical' would also have to be construed as involving a human element. Placing relevance upon the following decisions, Learned Counsel submitted that the assessee and other companies having floated a new company known as VWEMCL through which standard facility is being made available to all the companies, without much of human interface, it cannot be called as "technical services". i) (2009) 319 ITR 139 (Del) CIT vs Bharti Cellular Ltd. ii) (2001) 251 ITR 53 (Mad)-Skycell Communications Ltd & Another vs DCIT iii) 124 TTJ 241 (Mum.) Kotak Securities Ltd vs Addl CIT iv) 125 TTJ 966(Mum.) Pacific Internet (India)(P) Ltd vs ITO v) (2010) 35 SOT 457 (Mum.) DCIT vs Angel Broking Ltd* vi) (2009) 123 TTJ 888 (Jaipur) Jaipur Vidyut Vitran Nigam Ltd vs DCIT 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they collect from Members base on same crieteria. VWEMCL after discussion with GIDC. Vapi Industrial Association & Member have decided that based on actual water consumed by member unit and based on discharge quality norms, a member unit to pay 'Effluent Treatment Charges'. If the 'Effluent Treatment Charges' collected from member is excess than amount actually spend, it is pass on to member by way of discount. **** **** **** As explained earlier, Ruby Macons Ltd. did not specify or instruct, what VWEMCL to perform. VWEMCL, treat the water as per the norms of Gujrat pollution Control Board and are responsible to GIDC and Gujarat pollution control Board. As far as, Ruby Macons Ltd. is concern, it's a pure commercial decision to be member of common effluent treatment plant and pay his share of expenses incurred by VWEMCL and a compliance to obtain NOC from Gujrat pollution Control Board." 10. On the other hand, learned DR strongly relied upon the Orders passed by the tax authorities. He submitted that affluent treatment is a technical service rendered by VWEMCL since it requires technical analysis of the nature of pollutants discharged by each company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with regard to transmission lines. Merely because operation and maintenance of transmission lines and maintaining its grid station was with the help of certain work force, it cannot be considered that they were rendering any technical services to the assessee since they can be said to be simply discharging their function of operating and maintaining its grid station and transmission lines. Analysing section 194J of the Act, the Bench further noticed that only when the technology or technical knowledge of a person is made available to others it can fall within the expression 'technical service' and mere permission to use technology would not attract provisions of section 194J of the Act. 14. We may turn to the facts of the case on hand so as to appreciate as to whether the services rendered by VWEMCL involves human interface or was it merely a standard facility provided to all the members who were jointly involved in setting up affluent treatment plant. It is not in dispute that the rate is fixed depending on the actual water consumed by member unit and also based on discharge quality norms. It is also not in dispute that amount collected is on no profit no loss basis and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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