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TMI Blog2018 (3) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... al services/information. In our opinion the AR head rightly argued that technical services would not include services provided by the machines. In the case of Parsurampuria Synthetic Ltd. (2007 (11) TMI 436 - ITAT DELHI), the tribunal has held that there might be use of services of technically qualified person to render the services, that same would not bring the amount paid as fee for technical services within the meaning of explanation 2 to section 9 (1) (vii)of the Act. Accordingly, we hold that payment made by the assessee to UEEL for exhibiting the work contract would fall within the provisions of section 194C of the Act and not under the section 194 J. - I.T.A./2710/Mum/2015 - - - Dated:- 1-3-2018 - Sh.Rajendra,Accountant Member And Amarjit Singh,Judicial Member For The Revenue : Shri Rajat Mittal-DR For The Assessee : Shri Sumant Chadha/Jitendra Trivedi ORDER PER RAJENDRA, AM Challenging the order dated 14/1/2015 of CIT(A)-50 Mumbai, the assessee has filed the present appeal. 2. The solitary Ground of appeal is about deduction of tax at source. During the year under consideration, the assessee filed an application u/s. 197 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se laws. After considering the available material, he held that the basic issue to be decided was as to whether the contract between the assessee and UEEL was a work contract or a service contract. He referred to the case of Bharti Cellular Ltd. (319ITR139)and held that word techni -cal services had to be read in narrower sense, that the words technical services in section 9 (1)(vii) r. w. Explanation 2 would appear between the words managerial and consultancy services, that the AO had reproduced certain portions of the agreement to hold that the nature of contract was technical-service-contract, that the assessee had argued that there was no human element and that the work was carried out by machines, that a careful study of agreements revealed that the projects required mechanical and human intervention, that the processing of solid waste was done with the help of machinery, that specialists had to monitor the process for strict environment compliance, that there was a human interface in the entire contract work, that the compost produced had to be certified by authorised persons, that conversion of MSW to solid fuel was to be certified by specialists, that landfill facility we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, that from Municipal Corporation the assessee got the contract, that it sub contracted the job (Pg-132 of the PB), that the work done by the assessee was for service contract. The Departmental Representative (DR)supported the order of the revenue authorities and stated that contract was for managing of solid waste, that technical people were involved in the whole process, that technical services were made available to the assessee, that while giving effect to the order of the FAA the AO granted relief about the tax portion, that after rectification amount involved under litigation was ₹ 4. 64 lakhs i. e. interest levied u/s. 201 (1A) of the Act. 5. We have heard rival submissions and perused the material before us. We find that CMC had awarded a contract for solid waste management in 2007, that municipal corporation had deducted tax at source u/s. 194C of the Act for the payments made to the assessee, that it had completed the execution of part of the project, that it had sub-contracted the operational and maintenance part of the main contract to UEEL, that the work was performed by UEEL under contractual obligation as per the requirements of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the work given to the sub-contractors involved construction work, welding, erection, alignment, transportation of equipment and materials with the help of machines which did not fall within the scope of technical services as defined in Explanation 2 to section 9(1)(vii). He also held that merely because technical personnel were employed in the execution of the contract it did not follow that the contract was one for technical services. The Appellate Tribunal confirmed the findings of the FAA. Dismissing the appeal filed by the department, the Hon ble High Court held as under: . . the contract entered into between the assessee and each of the contractors did not involve supply of professional or technical services at least within the meaning of section 194J of the Income-tax Act, 1961. Therefore, the considerations paid under the contracts were not for professional or technical services rendered by the contractors to the assessee and section 194J was not applicable. The technical personnel were deployed not for and on behalf of the customer, but for and on behalf of the contractor itself with a view to ensuring that the contractor supplied the equipment in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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