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TMI Blog2019 (2) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) as well as ITAT came to the conclusion that the services that were rendered by these two entities were not of a technical or professional nature that would require deduction of TDS under Section 194J. The CIT (Appeals) specifically came to the conclusion that the contract between the assessee and these two entities was in the nature of a 'works contract' and therefore the deduction of TDS under Section 194C was correctly done by the assessee. In these circumstances, we do not find that these factual findings suffer from any perversity that would give rise to any substantial question of law. TDS u/s 194C OR 194H - Drug Handling Charges paid - HELD THAT:- We are fully satisfied that in the facts of the present case, the assessee correctly deducted TDS under section 194C. We find that in the present case there was no question of payment of any commission to Saxsons Biotech which supplied the radioactive drug used by the assessee in Nuclear Medicine Treatment. The facts and as recorded by the authorities below would clearly show that the drug supplied by Saxsons Biotech to the assessee was invoiced by Saxsons Biotech in the manner set out earlier. This being the case, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us. 2. Mr. Suresh Kumar, the learned Advocate appearing on behalf of the revenue, submitted that in ITXA No.105 of 2016, ITXA No. 128 of 2016 and ITXA No.115 of 2016 four questions of law arise for our consideration which read as under :- (a) Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in not treating the Hospital Based Consultants (HBCs) as employees and therefore provisions of Section 192 is not applicable? (b) Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in holding that payment made to Hinduja TMT/Hinduja Global Solutions Ltd., TDS is required to be deducted under Section 194C and not under Section 194J of the Act? (c) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in holding that drug handling charges paid by the assessee are covered under Section 194C for the purpose of TDS without appreciating that these charges are commission liable for TDS under section 194H? (d) Whether on the facts and in the circumstances of the case and in law, the ITAT was correct in holding that the payment made to the employees of Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer inter alia held that the Hospital Based Consultants (HBCs) were employees of the assessee and therefore tax was required to be deducted under Section 192 of the IT Act. The Assessing Officer further held that payments made to Hinduja TMT/Hinduja Global Solution Ltd. required deduction of TDS under Section 194J and not under Section 194C of the Act. Since the assessee had deducted tax under Section 194C, the Assessing Officer brought the difference to tax. Thereafter, the Assessing Officer further held that the drug handling charges paid to M/s Saxsons Biotech, the assessee ought to have deducted TDS under Section 194H. The Assessing Officer came to this conclusion because he was of the opinion that M/s Saxsons Biotech had acted as an agent of the assessee and was paid a commission for that purpose. It is on all these counts, the Assessing Officer passed the assessment order dated 24th March, 2011 under Section 201(1) and the order dated 28th September, 2011 under Section 201 (1A). 7. Being aggrieved by these actions of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) [for short CIT (Appeals)] . The learned CIT (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar further submitted that the ITAT had also erred in holding that for the drug handling charges paid by the assessee, TDS was correctly deducted under Section 194C of the I.T. Act. He submitted that the ITAT failed to appreciate that the charges paid to Saxson Biotech were charges in the nature of a commission and therefore TDS was liable to be deducted under Section 194H and not under Section 194C of the I.T. Act. 12. Similarly, Mr. Suresh Kumar submitted that the payments made by the assessee to the Hinduja Foundation was in the nature of payment made for professional fees and therefore required deduction of TDS under Section 194J. He submitted that the CIT(A) and the ITAT had completely gone wrong in coming to the conclusion that these payments were in the nature of reimbursements. For all the aforesaid reasons, Mr. Suresh Kumar submitted that substantial questions of law arise for our consideration (and as reproduced above) and therefore the appeals be allowed and the impugned orders passed in all the above appeals be set aside. 13. On the other hand, Mr. Tiwari, the learned Advocate appearing on behalf of the assessee took us through the impugned orders and submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultant doctors employed in the hospital. After perusing the law on the subject, this Court answered the aforesaid question in favour of the assessee and against the revenue. We find that as far as Question (a) is concerned, the same has been answered against the revenue and in favour of the assessee as per the judgment delivered by this Court in the case of Commissioner of Income-tax (TDS Pune) (ITXA No.140 of 2013) (supra). In fact, when this judgment was brought to the notice of Mr. Suresh Kumar, he fairly conceded that Question (a) would be covered by this decision. This being the case, in our opinion, Question (a) does not give rise to any substantial question of law. Re: Question (b):- 16. As far as Question (b) is concerned, we find that the CIT (Appeals) examined the payments made to Hinduja TMT/Global Solution Ltd. towards call centre expenses. The CIT (Appeals) noted that the work done by these two entities includes primarily providing the customer information pertaining to the hospital and fixing appointments. The appointment list contains the names of various Departments/Consultants. The call centre gives appointments and also gives instructions to callers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perversity that would give rise to any substantial question of law. In these circumstances, we find that Question (b) also does not give rise to any substantial question of law requiring for our consideration. Re: Question (c):- 19. Question (c) is regarding Drug Handling Charges paid by the assessee to M/s Saxsons Biotech. On this issue the CIT (A) noted the relevant material. The CIT (Appeals) noted that M/s Saxsons Biotech arranges a particular drug, which is not ordinarily available in the market. It is a radioactive material required in nuclear medicine treatment. It is supplied to the assessee at a particular price. The charges invoiced by the supplier includes the cost of material, freight charges, customs duty, the clearing forwarding charges, delivery charges etc. The invoice raised by M/s Saxsons Biotech consist of two parts, one is of actual cost of the material supplied and the other is for the service charges on which tax is deducted under Section 194C. After noting all these facts, the CIT (Appeals) held that the assessee had correctly deducted TDS under Section 194C. These findings are confirmed by the ITAT. 20. On going through the findings given by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT (Appeals) after considering the order passed by the Assessing Officer, the submissions of the assessee and the nature of services carried out by the service providers, held that payments made to the Hinduja Foundation was towards reimbursing the salaries of Senior Management Personnel deputed by Hinduja Foundation to the assessee hospital. All these personnel were on the pay-roll of the Hinduja Foundation and they got all the benefits from the Foundation. In turn, the Foundation raised a debit note towards actual cost of employment and accordingly the assessee made the payments to the said Foundation and which was therefore clearly in the nature of reimbursement. It was in these circumstances, and after hearing the parties and perusing the material on record, the ITAT concurred with the findings of the CIT (Appeals). In these circumstances, the ITAT opined that the payments made by the assessee to the Foundation were not in the nature of fees for technical services and therefore confirmed the order passed by the CIT (Appeals). 22. On going through the findings given by the CIT (Appeals) as well as the ITAT on this issue, we find that both the authorities below have given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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