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TMI Blog2018 (9) TMI 1399X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 194J of the Act and raised a demand of Rs. 27,43,918/- by treating the payments made by the assessee company as professional fees." 2. Brief Facts of the case are as under: Assessee is wholly owned subsidiary of Akon Inc., USA. Ld.AO during the inspection conducted under section 133A on assessee observed that assessee has made payment of Rs. 2,57,88,692/- as job work charges to BEL, Bangalore and deducted tax of Rs. 5,15,77/-, at 2% under the provisions of section 194C of the act. During the course of survey, assessee was asked to furnish the copy of contract agreement with BEL, Bangalore. Ld.AO observed that assessee entered into a teaming agreement with Bharat Electronics Ltd, a Government of India Defence undertaking, or supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 194J in respect of payments made to BEL. 5. Aggrieved by the order of Ld. AO, assessee preferred appeal before Ld. CIT (A) who allowed the claim of assessee by holding that the payments made by assessee do not fall under the definition of the term "professional services" as no technical consultancy has been offered. Ld.CIT (A) is deleted the addition made by Ld.AO. 6. Aggrieved by the order of Ld.CIT (A) the revenue is in appeal before us now. 7. The only ground raised by revenue is regarding application of provisions of section 194C of the Act, by Ld.CIT (A) in respect of the payments made by assessee to BEL. Ld. Sr. DR submitted that the contract entered into by assessee with BEL cannot be executed without involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations of Ld. AO regarding provision of technical training assistance to the staff of BEL by assessee is misconceived as the training was provided, to make them understand requirement of assessee, for assembling M1 and M2 module, for which assessee separately charged BEL its fees. In support of his argument he referred to Annexure G of the agreement, which provides pricing for Coproduction Phase. He thus submitted that the present case services rendered by BTL to assessee do not fall under the definition of "professional services" as no technical consultancy has been rendered by BEL to assessee. 10. We have perused the submissions advanced by both the sides in the light of the records placed before us. We have perused the agreement dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed opinion the agreement very clearly spells out that BEL undertook assembling of raw materials provided by assessee in respect of module M1 and M2, as per specifications provided by assessee. No doubt certain training has been provided by assessee to the engineers of BEL, however these rendering of training has been separately remunerated by BEL to assessee. Thus in our considered opinion payment received by BET L towards the work carried on under Phase II of the agreement, will not fall under the definition of the term professional services as no new technical consultancy has been offered by BEL to assessee. We therefore do not find any fault in the observations of Ld.CIT (A) in holding that the work undertaken by BEL is covered under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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