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TMI Blog2017 (8) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the considered view that as ‘Web Hosting Charges’ can safely be construed as a facility which is provided to facilitate hosting of a website, therefore, the fee provided by the assessee for availing such service cannot be characterized as a ‘as a fee for technical service’. Thus when web hosting cannot be held to be in the nature of ‘technical service’, therefore the amount paid by the assessee as regards the same would not be liable for deduction of tax at source u/s. 194J. - Decided in favour of assessee TDS u/s 194J - amount paid towards renewal of SAP Licence - whether the payment by the assessee towards renewal of SAP Licence was in the nature of payment towards ‘technical services’/’royalty’, as provided in Explanation 2 of Section 9(1)(vii)/Section 9 (1)(vi)? - Held that:- We respectfully follow the aforesaid judgment in the case of Infrasoft Ltd. (2013 (11) TMI 1382 - DELHI HIGH COURT) and finding ourselves as being in agreement with the aforesaid view arrived at by the coordinate bench of Tribunal in the case of Reliance Industries Ltd. (2016 (6) TMI 96 - ITAT MUMBAI ), are thus of the considered view that the amount paid by the assessee towards renewal of SAP lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on AMC for Air conditioners - TDS u/s 194C OR 194J - Held that:- When the AMC charges for air conditioners paid by the assessee were in term with the contents of the composite contract for supply of spare parts and services, therefore, as observed by the CIT(A), the assessee had rightly deducted tax at source u/s. 194C and could not be held to be liable for deduction or tax at source u/s. 194J. We thus finding no infirmity in the order of the CIT(A), thus uphold the same in respect of the issue under consideration. Short/deficit deduction of tax at source in respect of ‘hoarding charges’ - TDS u/s 194I OR 194C - Held that:- The benevolent circulars issued by the CBDT are binding on the department, and there can be no escape on the part of the department to give effect to the same. We thus are of the considered view that now when the CBDT itself had held that the assessee would be liable for deduction of tax at source in respect of ‘hoarding charges’ under Sec. 194C, with the sole exception that where such ‘hoarding rights’ are sub-let by the assessee, the deduction of tax at source in such cases would be under Sec. 194I. We are of the considered view that now when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rendered by M/s. Makani Services Pvt. Ltd.(supra) as elaborated by us hereinabove, squarely falls within the sweep of the definition of ‘Professional services’ as stands contemplated in the Explanation (A) of Section 194J of the ‘Act’. We thus in light of our aforesaid observations are not persuaded to accept the contention of the ld. A.R. that it was under no obligation to deduct tax at source u/s 194J in respect of payments made to the aforesaid concern, viz. M/s Makani Creative (P) Ltd., and being of the considered view that the assessee had availed the professional services of M/s Makani Creative Pvt. Ltd. (supra), therefore, hold that the latter was liable for deduction of tax at source u/s. 194J. - I.T.A(s). No. 1460 to 1462/Mum/2014 And I.T.A. No. 3528/Mum/2015, .T.A (s) . No. 1263 to 1265/Mum/2014 And I.T.A. No.4015/Mum/2014 - - - Dated:- 31-7-2017 - SHRI G.S. PANNU, AM AND SHRI RAVISH SOOD, JM For The Appellant : Shri V. Vidhyadhar (D.R) For The Respondent : Shri D.V. Lakhani (A.R.) ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present cross appeals filed by the assessee and the revenue are directed against the orders passed by the CIT(A)-14, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal which are without prejudice to one other . 2. Briefly stated, the facts of the case are that the assessee company is engaged in the business of sale of shoes, bags and other leather products. The assessee company which has a countrywide network of exclusive metro showrooms at more than 72 locations across 32 cities in India, procures goods from various parties which are sold after labelling and packaging the same. 3. That survey action u/s. 133A of the Act was carried out on 04.08.2011 at the premises of the assessee company, viz. Metro House, 3rd floor, S.B.S. Road, Colaba Causeway, Mumbai, in order to verify the compliance of the TDS provisions by the latter. That during the course of the survey proceedings it was observed that the assessee company had either failed to deduct or had short deducted tax at source in respect of certain amounts. The A.O thereafter on the basis of the information gathered during the course of the survey proceedings, therein holding the assessee as being in default in respect of the aforesaid failure to deduct and/or short deduction of tax at source, held the latter as being in default in respect of certain transactions, which are brie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission paid to bank for Credit Card sales facility:- The CIT(A) taking support from the order passed by a coordinate bench of the ITAT, Mumbai in the case of M/s Kotak Securities Ltd. in ITA No. 6657/Mum/2011, dated 03.02.2012 for A.Y. 2004-05, wherein the Tribunal had observed as under:- In the case before us, there is no principal agent relationship between the bank issuing the bank guarantee and the assessee. When bank issues the bank guarantee, on behalf of the assessee, all it does is to accept the commitment of making payment of a specified amount to, on demand, the beneficiary and it is in consideration of this commitment, the bank charges a fees which is customarily termed as 'Bank Guarantee Commission. While it is termed as guarantee commission it is not the nature of commission' as it is understood in 'common 'business parlance and in the context of the section 194H. This transaction, in our considered view, is not a transaction between principal and agent so as to attract the tax deduction requirements u/s.194H. We are, therefore, of the considered view that the CIT(A) indeed, erred in holding that the assessee was indeed under ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee for renewal of SAP Licence, it was observed by the CIT(A) that as the same was clearly in the nature of payment towards technical services/royalty, therefore, the A.O had rightly held that the assessee was under a statutory obligation to deduct tax at source u/s. 194J in view of the meaning of the term fees for technical services / royalty provided in Explanation 2 of Section 9(1)(vii)/Section 9(1)(vi) of the Act . The CIT(A) thus on the basis of her aforesaid observations upheld the order of the A.O treating the assessee as being in default u/ss. 201(1)/201(1A) in respect of the aforesaid payments. (iv) That as regards the amount paid by the various retail dealers of the assessee company towards computer AMC, it was observed by the CIT(A) that as each of the respective payment was found to be lower than ₹ 20,000/-, therefore, the assessee remained under no obligation for deducting tax at source in respect of the said amounts. The CIT(A) thus on the basis of her aforesaid observations set aside the order of A.O treating the assessee as being in default u/ss. 201(1)/201(1A) in respect of payments made by the retail outlets for computer AMC. (v) Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case, therein referring to CBDT Circular No. 715, dated 08.08.1995, which clearly provided that as the contract for putting up of a hoarding was in the nature of an advertising contract, therefore, the provisions of Section 194C would be applicable in respect of the amounts paid towards hoarding/bill board charges. The CIT(A) further observed that the aforesaid CBDT Circular No. 715 (supra ) further provided that if there was a sub-letting of hoarding by the assessee, then the latter would remain under a statutory obligation to deduct tax at source u/s. 194I. The CIT(A) in the backdrop of the aforesaid settled position of law, therein being of the considered view that as the assessee had not indulged in sub-letting of hoarding rights acquired by it, therefore concluded that the payments made by the assessee were towards a works contract, and the tax was liable to be deducted u/s.194C. The CIT(A) on the basis of her aforesaid observations therein set aside the order of the A.O treating the assessee company as being in default u/ss. 201(1)/201(1A) for short/deficit deduction of tax at source in respect of the payments made towards hoarding charges, and resultantly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as being in default in respect the tax liability u/s. 201(1). It was however observed by the CIT(A) that the assessee would continue to be liable for interest u/s. 201(1A) from the date on which such tax was deductible, till the date on which such tax was paid by the payee. 8. That the assessee being aggrieved with the order of the CIT(A) partly sustaining the order of the A.O treating the assessee as being in default u/ss.201(1)/201(1A) for short/deficit deduction of tax at source, had therein carried the matter in appeal before us. 9. That the Authorized Representative (for short A.R.) for the assessee at the very outset of the hearing of the appeal submitted that the CIT(A) had erred in sustaining the order of the A.O holding the assessee as being in default u/ss. 201(1)/201(1A), for the reason that the latter had failed to deduct tax at source u/s. 194J in respect of the payments made towards Web Hosting Charges amounting to ₹ 2,07,500/- (out of expenses aggregating to ₹ 3,97,476/- booked by the assessee under the head Purchase of Computer parts accessories ). It was submitted by the ld. A.R that the CIT(A) had wrongly concluded that Web Hostin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . Thus, a perusal of the aforesaid definition of the term fees for technical services clearly reveals that any consideration (including any lump sum consideration) paid by an assessee for the rendering of any managerial, technical or consultancy services (including provision of services of technical or other personnel) had been brought within the sweep of the aforesaid term. We find that the assessee during the year had incurred the aforesaid charges for facilitating hosting of its ecommerce website on the partner servers (i.e cloud based server hosting), and as stands gathered from a perusal of Page 88 of APB , had made the aforesaid payment to M/s Infoton Systems Services (P) Ltd, Mumbai. We find that our ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... willing to pay for it, irrespective of the fact that the provision of such services involved usage of technical equipment on the part of said person to facilitate providing of the services, cannot be characterized as availing of technical service on the part of the consumer. 11. We have given a thoughtful consideration to the facts of the case in the backdrop of the settled position of law. We are of the considered view that though the provision of Web Hosting Charges by the service provider would involve installation of sophisticated equipment on his part to facilitate rendering of such services to the customers, however the collection of a fee by him for use of such standard facility provided to all those willing to pay for it cannot be characterized and therein brought within the sweep of the term fee for technical services . We further find that a coordinate Bench of the Tribunal, viz. ITAT, Mumbai Bench D in the case of Pacific Internet (India) Pvt. Ltd. Vs. ITO (2009) 125 TTJ 966 (Mum), relying on the aforesaid judgment of the Hon ble High Court of Madras in the case of Skycell Communication Ltd. (supra) had also held that mere collection of a fee for use of sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said amount. 13. We have given a thoughtful consideration to the facts of the case and are of the considered view that as per the Explanation 4 of Section 9(1)(vi), as had been made available on the statute vide the Finance Act, 2012, w.r.e.f 01.06.1976, it has been clarified that royalty takes within its sweep any amount paid in lieu of transfer of all or any rights in respect of any right, property or information, which shall include and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence), irrespective of the medium through which such right is transferred. We find that the assessee had during the year under consideration made a payment towards renewal of SAP licence for two years, but however had not deducted tax at source in respect of the same. We find that the fees paid by the assessee for renewal of the SAP licence for a period of two years, therein only vested with it the rights which were limited to those necessary to enable it to use the software only for its own business, for the aforesaid period of two years, and in no way vested with it any right to loan/rent/sale/sub-licence or tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 9(1)(vi) of the Act , being clarificatory in nature is to be taken as had always been available on the statute, however, the fact that the aforesaid position of law was not available at the time when the assessee had made the payments towards purchase of the software, nor there was any such judgment of any Court on the basis of which a payment made by an assessee towards purchase of software could be construed as royalty u/s. 9(1)(vi) and subjected to deduction of tax at source, therefore, the assessee who remained under a bonafide belief that no tax at source was deductible in respect of the said amount, thus could not be held as being in default for having failed to have deducted tax at source u/s. 194J at the time of making of the aforesaid payment. We respectfully follow the aforesaid judgment of the Hon ble High Court of Delhi in the case of Infrasoft Ltd. (supra), and finding ourselves as being in agreement with the aforesaid view arrived at by the coordinate bench of Tribunal in the case of Reliance Industries Ltd. (supra), are thus of the considered view that the amount paid by the assessee towards renewal of SAP licence for a period of two years, can neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I.T. Act, and thereby erred in deleting the short deduction u/s.201(1). ( ii) On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating the fact that Annual maintenance contract for Computer software, air conditioner and pest control require technical skill and human element and are subjected to TDS u/s. 194J and not u/s. 194C of the Act. ( iii) On the facts and circumstances of the case and in law, the Id. CIT (A) has erred in deleting the short deduction on hoarding charges u/s.194I of the Act and not considering the same as rent but a work contract u/s. 194C of the Act. ( iv) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the interest u/s 201(1A) of the I.T. Act, 1961, determined by the A.O as the tax determined has already been deleted by her and interest deletion is consequential to the quantum deletion for which further appeal has been recommended vide ground Nos. (i), (ii) (iii). 2. The appellant craves leave to add, amend, alter or modify any ground which may be necessary at the time of the hearing of the case or thereafter. 3. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clearly a transaction the merchants establishment only and the credit card company only facilitates the electronic payment, for a certain charge. The commission retained by the credit card company is therefore in the n a tu r e o f no rma l b an k c h ar g e s an d no t in th e n a tu r e o f commis s ion/brokerage f or a c t ing on behal f of the me r chant es tabl is hment. Ac c o rding ly, c onc luding that the r e was no requirement for making TDS on the 'Commission retained by the credi t card companies, the disal lowance of ₹ 16,34,000/- is deleted....... 19. We have heard the Authorized Representatives for both the parties, perused the orders of the lower authorities and the material placed on record in respect of the issue under consideration. We find that the CIT(A) by drawing an analogy from the order of a coordinate bench of the Tribunal viz. ITAT, Mumbai in the case of M/s. Kotak Securities Ltd. (supra), had therein concluded that on the footing that an assessee remained under no obligation to deduct tax at source u/s. 194H in respect of Bank Guarantee Charges, it could therefore safely be concluded that no such liability was also cast on the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol:- We find that the CIT(A) being of the considered view that the payments made by the assessee towards AMC for pest control did not involve any professional or technical services, but as definitely there was a contract of work, therefore, the assessee had rightly deducted tax at source u/s. 194C, and could not be brought within the sweep of Section 194J. The ld. D.R could not controvert the aforesaid observations of the CIT(A). We find no infirmity in the aforesaid observations of the CIT(A) and are persuaded to be in agreement with him. We thus uphold the order of the CIT(A) in respect of the aforesaid issue under consideration and therein hold that the assessee could not be held to be in default in respect of short/deficit deduction of tax at source in respect of the payments made towards AMC for pest control. ( iii) AMC for Air conditioners:- We find that the CIT(A) had observed that as the payments made towards the AMC for air conditioners was backed by a composite contract of supply of spare parts and services, therefore, the case of the assessee was squarely covered by the provisions of Section 194C and could not be brought within the sweep of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. A.R that the CBDT in its aforesaid circular had further observed that if in case the assessee had further sub-let his right towards the hoarding, it was only then the provisions of Section 194I would be attracted. Per contra, the ld. D.R. though relied on the order of the A.O, but could not controvert the aforesaid contentions of the assessee. We find that the CIT(A) while adjudicating the aforesaid issue had specifically referred to and relied upon the CBDT circular No. 715 (supra), and therein observing that as the assessee had not sub-let the hoarding rights acquired by it, had therefore held that the assessee was not liable for deduction of tax at source under Section 194C. 24. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We are not oblivious of the fact that the benevolent circulars issued by the CBDT are binding on the department, and there can be no escape on the part of the department to give effect to the same. We thus are of the considered view that now when the CBDT itself had held that the assessee would be liable for deduction of tax at source in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. 27. That while for the appeal of the assessee for A.Y. 2009-10, marked as ITA No. 1460/Mum/2014 is partly allowed, the appeal of the revenue, marked as ITA No. 1263/Mum/2014 is dismissed. A.Y. 2010-11 ITA No. 1461/Mum/2014 28. We now advert to the appeal of the assessee for A.Y. 2010-11. The assessee had assailed before us the order of the CIT(A), wherein the latter had upheld the order of the A.O treating the assessee as being in default u/ss. 201(1)/201(1A) in respect of certain payments. The assessee assailing the order of the CIT(A), had therein raised before us the following grounds of appeal:- 1. On the facts circumstances of the case the Learned Commissioner of Income Tax (Appeals) has erred in confirming that the provisions of Section 201(1) of Income Tax Act, 1961 is applicable and treating the appellant as assessee in default by invoking the provisions of Section 194J in respect of the payment for web posting charges amounting to Rs. 6,88,535/-. The appellant prays that the conclusion reached by the Learned Assessing Officer is erroneous as the appellant was not liable to deduct tax at source u/s 194J on the payment of annual mainten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is partly allowed in terms of our aforesaid observations. A.Y.2010-11 ITA No. 1264/Mum/2014 32. We now take up the appeal filed by the revenue for A.Y. 2010-11. The revenue being aggrieved with the order of the CIT(A) setting aside the order of the A.O treating the assessee as being in default u/ss. 201(1)/201(1A), in respect of certain amounts, had therein carried the matter in appeal before us. The revenue assailing the order of the CIT(A) had raised before us the following grounds of appeal:- 1. Grounds of appeal ( i) On the facts and circumstances of the case and in law, the Id. CIT(A) has erred by holding that provisions of sec. 194C are appl icable and not the provisions of section 194H as held by the A.O without appreciating the fact that such payments made for the use of the credit card is squarely covered by the def inition of Commission or brokerage given in explanation (i) below the third proviso to section 194H of the I.T. Act, and thereby erred in deleting the short deduction u/s.201(1). ( ii) On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating the fact that Annual maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. A.Y. 2011-12 ITA No. 1462/Mum/2014 37. We now take up the appeal of the assessee for A.Y. 2011-12. The assessee assailing the order of the CIT(A), wherein the latter had upheld the order of the A.O treating the assessee as being in default u/ss. 201(1)/201(1A) in respect of certain amounts, had therein carried the matter in appeal before us. The assessee being aggrieved with the order of the CIT(A) had raised before us the following grounds of appeal:- 1. On facts circumstances of the case the Learned Commissioner of Income Tax (Appeals) has erred in confirming that the provisions of Section 201(1) of Income Tax Act, 1961 is applicable and treating the appellant as assessee in default by invoking the provisions of Section 194J in respect of the payment for web posting charges amounting to ₹ 5,28,850/-. The appellant prays that the conclusion reached by the learned Assessing Officer is erroneous as the appellant was not liable to deduct tax at source u/s 194J on the payment of annual maintenance contracts. 2. On the facts circumstances of the case the Learned Commissioner of Income Tax (Appeals) has erred in confirming that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tis mutandis for adjudicating the Ground of appeal no. 1, Ground of appeal no. 2, Ground of appeal No. 4 and Ground of appeal No. 5, respectively, in the present appeal of the assessee for A.Y. 2011-12, marked as ITA No. 1462/Mum/2014. That in terms of our aforesaid observations, the Ground of appeal no. 1 is allowed, Ground of appeal no. 2 is allowed, Ground of appeal No. 4 is dismissed as infructuous and the Ground of appeal no. 5 being general in nature is dismissed. 39. The assessee vide Ground of appeal no. 3 raised in the present appeal, had assailed the order of the CIT(A), wherein the latter had sustained the order of the A.O treating the assessee as being in default u/s. 201(1) in respect of the payment made for SAP resource deployment charges. It had been averred by the ld. A.R that as the payment made towards SAP resource deployment charges amounted to ₹ 25,000/-, therefore, it was not liable for deduction of any tax at source in respect of the aforesaid amount u/s. 194J. 40. We have given a thoughtful consideration to the aforesaid contention so raised by the ld. A.R. We are of the considered view that now when we have allowed the Ground of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T. Act, 1961, determined by the A.O as the tax determined has already been deleted by her and interest deletion is consequential to the quantum deletion for which further appeal has been recommended vide ground Nos. (i), (ii) (iii). 2. The appellant craves leave to add, amend, alter or modify any ground which may be necessary at the time of the hearing of the case or thereafter. 3. The order of the CIT(A) being erroneous be set aside and A.O's order be restored . 43. We find that the Grounds of appeal no. 1 to 3 raised by the revenue before us in the present appeal for A.Y. 2011-12, marked as ITA No.1265/Mum/2014 involves the same issues as were raised before us by the revenue in its appeal for A.Y. 2009-10, marked as ITA No. 1263/Mum/2014. Thus in light of the aforesaid factual position, we herein direct that our order passed while disposing of the Ground of appeal No. 1(i) to (iv), Ground of appeal no. 2 and Ground of appeal no.3 in the appeal of the revenue for A.Y. 2009-10, marked as ITA No. 1263/Mum/2014, shall apply mutatis mutandis for disposing of the present appeal of the revenue for A.Y. 2011-12. The Ground of appeal 1(i) to (iv), Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts circumstances of the case the Learned commissioner of income tax (Appeals) has erred in conf irming that the payments made M/s. Makani Creatives Pvt. Ltd. are in the nature of retainership fees liable to deduction of tax under Section 194J. The appellant prays that all the payments made to M/s. Makani Creatives Pvt. Ltd. including monthly lump sum payments are in the nature of contractual payments and are not professional fees. The appellant further prays that conclusion reached by Learned Assessing Officer is erroneous and contrary to the facts. 5. On the facts circumstances of the case the Learned commissioner of income tax (Appeals) has erred in confirming the levy of interest at ₹ 12,53,145/- u/s 201(1A) of Income Tax Act, 1961 by invoking the provisions of Section 194J. The appellant prays that the demand raised by Learned Assessing Officer levying the interest may be deleted. 6. On the facts circumstances of the case and without prejudice to the claim that appellant is not liable to deduct tax at source u/s.194J and pay interest u/s 201(1A), the Commissioner of income tax (Appeals) has erred in confirming levy of interest for 18 months am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards AMC charges had duly included the same in their return of income and paid taxes on the same, therefore, in light of the judgment of the Hon ble Supreme Court in the case of Hindustan Coca Cola Beverages Pvt. Ltd.(supra), the said tax liability could not once again be recovered from the assessee company. Per contra, the ld. D.R. relied on the orders of the lower authorities and therein submitted that as the assessee had failed to deduct tax at source u/s. 194J, therefore, it had rightly been held as being in default in respect of short/deficit deduction of tax at source. 49. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that the CIT(A) after reproducing the statements of the assessee, had however failed to adjudicate the issue under consideration by way of a speaking order, and had rather summarily dismissed the appeal of the assessee on the issue under consideration. We are of the considered view that the CBDT in its Circular No. 715, dated 08.08.1995, had therein held as under:- Question 29: Whether a maintenance contract including supply of spa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 201(1). It may however be clarified that in case the assessee is principally held liable towards tax liability determined u/s 201(1) in respect of the aforesaid payments, then the latter would continue to remain liable in respect of interest liability u/s. 201(1A) pertaining to the aforesaid tax liability, for the period starting from the date on which the tax was liable to be deducted, till the date of payment of tax by the payees. The Grounds of appeal no. 1 and 2 so raised by the assessee before us are thus allowed for statistical purposes. 51. The ld. A.R had further averred before us that the CIT(A) had erred in confirming the levy of interest u/s. 201(1A) for a period of 36 months in respect of the tax determined u/s. 201(1) pertaining to the payments made by the assessee towards AMC for computers. We find that as the said contention of the assessee can only be adjudicated after referring to the facts available on record, which are not there before us, therefore, now when we have pursuant to our aforesaid directions called upon the A.O to carry out a fresh adjudication in respect of the liability of the assessee as regards deduction of tax at source u/s 194J, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was clearly availing the professional services of the aforesaid concern, viz. M/s Makani Creative Pvt. Ltd.(supra). We find that the nature of services rendered by M/s. Makani Services Pvt. Ltd.(supra) as elaborated by us hereinabove, squarely falls within the sweep of the definition of Professional services as stands contemplated in the Explanation (A) of Section 194J of the Act . We thus in light of our aforesaid observations are not persuaded to accept the contention of the ld. A.R. that it was under no obligation to deduct tax at source u/s 194J in respect of payments made to the aforesaid concern, viz. M/s Makani Creative (P) Ltd., and being of the considered view that the assessee had availed the professional services of M/s Makani Creative Pvt. Ltd. (supra), therefore, hold that the latter was liable for deduction of tax at source u/s. 194J. We though are not oblivious of the fact that the CIT(A) had held that as the aforesaid concern, viz. M/s Makani Creative Pvt. Ltd (supra) had paid the tax on the amounts received from the assessee company, therefore, the assessee cannot be held as being in default as regards the tax determined u/s 201(1), and had allowed the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the A.O without appreciating the fact that such payments made for the use of the credi t card is squarely covered by the def ini t ion of Commission or brokerage given in explanation (i) below the third proviso to section 194H of the I.T. Act, and thereby erred in deleting the short deduction u/s. 201(1) of the/. I.T. Act. ( ii) On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating the fact that Annual maintenance contract for air conditioner and pest control requires technical skill and human element and are subjected to TDS u/s. 194J and not u/s. 194C of the Act. ( iii) On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in deleting the short deduction on hoarding charges u/s.1941 of the Act and not considering the same as rent but work contract u/s. 194C of the Act. ( iv) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the interest u/s 201(1A) of the I.T. Act, 1961, determined by the A.O as the tax determined has already been deleted by her and interest deletion is consequential to the quantum deletion for which fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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