MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA),MUMBAI vs. ACIT (TDS) CIRCLE - 1(3), MUMBAI

आयकर अपीऱीय अधिकरण “I” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.5186 & 5187/Mum/2016 (नििाारण वर्ा / Assessment Year: 2012-13 & 2013-14) बिाम/ Mumbai Metropolitan Region ACIT (TDS) CIR-1(3) Development Authority R.No. 703, 7 t h floor, K.G. (MMRDA) , BKC, Bandra(E), Mittal Hospital Building, v. Mumbai-400051 Charni Road(W), Mumbai- 400002 स्थायी ऱेखा सं./ PAN :AAATM7106R(TDS MUM16747D) (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

Assessee by: Shri. J.P Bairagra Revenue by : Shri. Saurabhkumar Rai,DR सुनवाई की तारीख /Date of Hearing : 05-02-2018 घोषणा की तारीख /Date of Pronouncement : 07 -02-2018 आदेश / O R D E R PER RAMIT KOCHAR, Accountant Member These two appeals, filed by the assessee, being ITA No. 5186 & 5187/Mum/2016 for assessment years 2012-13 & 2013-14 respectively are directed against the common appellate order dated 12.05.2016 passed by learned Commissioner of Income-tax (Appeals)-59, Mumbai (hereinafter called “the CIT(A)”) for assessment years 2012-13 & 2013-14 respectively, appellate proceedings had arisen before learned CIT(A) from the separate orders both dated 25.03.2015 passed by learned Assessing Officer (hereinafter called “the AO”) u/s 201(1)/201(A) of the Income-tax Act, 1961 (hereinafter called “the Act”). 2. First we shall take appeal of the assessee in ITA no. 5186/Mum/2016 for assessment year 2012-13. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) in ITA no. 5186/Mum/2016 for assessment year 2012-13 read as under:-

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―1. The learned CIT (Appeals) erred in holding that contract to M/s. DBM Geotechnics Construction Pvt. Ltd. has not been given for simple rock excavation work but is given for Marine Geo Technical Investigation for rock excavation in Mithi River. Therefore, it is covered by the provisions of section 194J and not as per the provisions of section 194C for deduction of TDS on total payment amounting to Rs. 7,59,32,109/- made to M/s. DBM Geotechnics Construction Pvt. Ltd. 2. The appellant craves to add to, alter or amend the foregoing grounds, which are without prejudice to one another, at the time of hearing.‖ 3. The assessee is a local authority created by the Government of Maharashtra by enacting MMRDA Act ,1974 and it is engaged in the business of planning, coordinating and supervising the development of the areas in the region and of executing plans, projects and schemes of such developments. The assessee has made payments to the tune of Rs. 7,59,32,109/- to M/s DBM Geotechnics and Construction Pvt. Ltd. on which income-tax was deducted at source (hereinafter called “TDS”) u/s. 194C by the assessee , while AO was of the view that the assessee is required to deduct TDS u/s. 194J of the Act. The assessee in response to the query raised by the AO submitted before the AO as under:- ―The Authority has given contract for rock excavation in Mithi River situated at the seaside of the Mahim Causeway to M/s. DBM Geotechnics and Construction P. Ltd. For doing the work, the contractor has used machined as well as manual labour. 2. During the year, the assessee has made total payment of Rs. 7,59,32,109/- to DBM in consideration of works executed by it. On the said payment the assessee has deducted TDS @ 2% u/s. 194C. We enclosing herewith copy of Extract of Tender documents and copy of account appearing in the books of the assessee for the period from 01- 04-2011 to 31-03-2013 as Annexure -2 3. For the Asstt. Year 2008-09 and 2011-12, your predecessor has considered the payment made to M/s. DBM Geotechnics as fees for technical service and held that TDS is to be deducted u/s. 194J whereas the assessee has deducted u/s. 194C. Aggrieved by the said order, the assessee has filed an appeal before CIT(A)'s but CIT(A) has also confirmed the view of the AO that TDS is to be deducted under section 194J and not under section 194C. To Challenge the order passed by Ld. CIT(A), assessee has filed an appeal before the Hon'ble ITAT, the hearings of which is pending till date.

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5.2.1 Further reference is also seen on page no. 3 of the tender document (enclosed to this order, marked as Annex ‗B‘) published in the news paper. In this advertisement also, it is mentioned that tender was for marine Geotechnical lnvestigation of Rock Excavation in Mithi River approach Channel. It is quite apparent that the nature of work was not that of simple contract works but requires special technical skills, knowledge and experience. 5.2.2 On further observation of the tender document, it is seen that page no. 12 has a title "Indicative Check List for Information from Consultants". On this page, the details of contract experience in carrying out Cadastral Survey under tidal condition as measurement and collection of Hydraulic and Physio-Chemical Parameters are given. It is further required that there shall be at least 3 keys personnel having bachelor's degree in Civil Engineering/Diploma in Survey Technology/Master's in Science/Environment. Course/Degree in Geographical Information Systems. This page no. 12 is annexed to this order marked as Annex. 'C'. 5.2.3 On further examination of the tender document, it is seen in Chapter VII(e) Schedule B at page no. 82 onwards of tender documents(enclosed as Annex. 'D' to this order) speaks about item of work to be carried out and rate for the same work. In this Schedule at item no. 7 on page no. 83 is the list of laboratory test and number of such tests required to be conducted to carry out excavation of rocks by the contractor. The same are listed out as under: Laboratory Tests: 1) Moisture Content 2) Specific Gravity 3) Consistency Limits. 4) Gravel & Fine Sieve analysis 5) Hydro Meter analysis 6) Consolidation 7) Direct Shear Test 8) Triaxial (UU) 9) UDS all about tests. Rock Samples 10) Specific Gravity 11) Water absorption 12) Porosity 13) Crushing Strength 14) Tensile Test 15) Modulus of Elasticity & Poission's ratio 16) Chemcial analysis of soil to determine chloride & sulphate content and 17) Chemical analysis of groundwater to determine chlorine and sulphate content and PH 5.2.4 From the above list of laboratory test and rock examination, it is crystal clear that the contract was not just a simple work contract, but was for providing highly technical services. The every entry in this list clearly speaks out the DBM was required to provide scientific and technical services coupled with consultancy. Such specialized services

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cannot be accomplished without involvement of professional caliber and merit. 5.2.5 It is worth to mention here that the assessee has conveniently not furnished the copy of technical bid, which may better describe the nature of services required. However on examination of limited information furnished by the assessee, it is seen that it was not a contract intended to be covered by the section 194C of the Act which covers a simple work contract including supply of labour etc., but is definitely a contract covered by the provisions of section 194J being fees for professional or technical services. The word 'Fees for technical services' means any consideration(including any lump sum consideration) for rendering any managerial/technical or consultancy service (including the provisions of services of technical or other personnel) . 5.2.6 Keeping in view the above definition of fees for technical services as well as the content of the contract awarded by the assessee deductor, it is absolutely clear that the services provided by DBM are absolutely in the nature of technical services and therefore the provisions of Section 194J are applicable in respect of payments made to M/s. DBM Geotechnics & Construction Pvt. Ltd. 6. In assessee's own case, earlier, on the same issue the then Assessing Officer while passing order u/s 201(1)/201(lA) for assessment year 2008-09 to 2011-12 treated the assessee as assessee in default for deducting TDS u/s 194C, instead of section 194J. The assessee being aggrieved by the order of the then ITO (TOS) -2(2) preferred an appeal before CIT(A)-14. The learned CIT(A) vide his order No. CIT(A)-14/IT.810 to 816/TDS Rg. 2/11-12 dated 24.10.2012, decided the issue in favour of the Assessing Officer. Further, the CIT(A) as per para 7.3 of the A.O's order restored the issue to the file of AO with the following direction:- "Since the facts, as stated by the AO and as stated by the appellant are opposite, the appellant is directed to furnish necessary evidence in support of the above facts, if any before the AO. After verifying the correctness of the facts pleaded by the appellant, the AO shall accordingly take a decision in this regard. If the contract to DBM Geotechnics Construction Private Ltd. Has been given for rock excavation work, the AO shall not treat the appellant to be in default and shall accordingly delete the demand raised. However, if as observed by the AO, the contract is for marine geo- technical investigation for the purposes of rock excavation in Mithi river, the AO's decision in this regard shall be upheld. In that case, however, the AO shall give relief to the appellant in respect of the tax already paid by DBM Geotechnics Construction Private Ltd. If any, on its receipts from the appellant, in view of the decision of the Hon'ble Apex Court in the case of Hindustan Coca Cola Beverage (p) Ltd. Vs. CIT [2007] 293 ITR 226. The AO is therefore directed accordingly.‘

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6.1 The assesse has also furnished the following details for claim of relief u/s. 201(1) in respect of Hon'ble Apex Court in the case of Hindustan Coca Cola Beverage (p) Ltd. Vs. CIT [2007] 293 ITR 226. In support of it, the assessee has submitted – 1. Audited Financial Statements of Accounts of DBM Geotechnics & Construction Pvt. Ltd. including Auditors Report under the Companies Act. 2. Acknowledgement of Income Tax return filed by the Company. 3. Computation of Total income. 4. Tax Audit Report under the Income Tax Act in Form 3CA and 3CD. 5. Copy of ledger account of MMRDA in the books of M/s. DBM Geotechnics & Construction Pvt. Ltd. 6. Form 26A issued by the Chartered Accountant of the deductee certifying that the amount received from MMRDA amounting to Rs. 7,59,32,109/- is already included in the income of M/s. DBM Geotechnics & Construction Pvt. Ltd in their return of income. 7. In the backdrop of discussion, the undersigned is fully convinced and satisfied that the payments made by the assessee deductor to DBM squarely fall within the ambit of Section 194J as it satisfied all the parameters prescribed in Sec. 194J, as also held by the CIT(A) in its order for A.Y. 2008- 09 to 2011-12. 8 During the year under consideration, the assessee has made the following payments to M/s. DBM Geotechnics Construction Pvt. Ltd. and deducted TDS @ 2% as per provision of section 194C, the details of the same are as under: Date of payment Amount paid to Tax Deducted ·Rate at which Tax is DBM Deducted 19.05.2011 1,17,40,706 2,34,814 2% 23.05.2011 1,75,28,681 3,50,574 2% 08.07.2011 1,85,24,236 3,70,485 2% 30.08.2011 1,50,66,839 3,01,337 2% 20.09.2011 50,24,936 1,00,499 2% 14.03-2012 80,46,711 1,60,934 2% Total 7,59,32,109 15,18,642 2% 9. In view of the above description and facts and circumstances of the case, I hold that the provisions of section 194J of the IT Act are clearly applicable in the assessee's case. Accordingly, TDS liability is determined under section 194J @ 10% which works out to Rs. 75,93,211/- Since the assessee has already deducted TDS@2% amounting to Rs. 15,18,642/-, balance amount representing short deduction of TDS is determined at Rs. 60,74,569/- and interest u/s. 201(1A) is worked out at Rs. 9,71,931/- for 16 months.

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10, However, since the Assessee has filed certificate from the auditor of DBM Geotechnics & Construtions to whom payment was made to the effect that it has filed its return of income including the payment received by the assessee company and paid taxes thereon. It has been contended that in view of judgment of the Hon'ble Supreme Court in Hindustan Coca Cola Beverage (P) Ltd. v/s. CIT in (2007) 211 CTR (SC) 545, no further tax can be recovered from the assessee company. Considering these facts of the case, tax liability u/s 201(1) is worked out to Rs. Nil and tax liability u/s. 201(1A) is worked out at Rs. 9,71,931/-.( From 19/05/2011 till the date of filing of return by DBM Geotechnics & Construction-24/09/2012 i.e. 16 months @1%). The AO therefore held that assessee was required to deduct income-tax at source u/s. 194J at the rate of 10% which workout to Rs.75,93,211 , while income-tax was deducted at source at the rate of 2% by the assessee which amounting to Rs. 15,18,642/- and hence for balance short deduction of income-tax at source was determined to be Rs. 60,74,569/-, but since however the assessee filed certificate from auditors of DBM Geotechnics and Construction Private Limited to the effect that it filed its return of income including the payment received from the assessee company and paid due taxes to the Revenue, the liability u/s 201(1) was determined by the AO against the assessee was computed at NIL u/s 201(1) but interest u/s. 201(A) was workout by the AO to be Rs. 9,71,931/- , vide order passed by the AO u/s. 201(1)/201(A) dated 25.03.2015. 4. Aggrieved by the order dated 25-03-2015 passed by the AO u/s 201(1) and 201(1A), the assessee carried the matter in appeal before the learned CIT-A who dismissed the appeal of the assessee by holding as under, vide appellate order dated12-05-2016:- “ 5. Ground No. 2 for the AYs 2012-13 & 2013-14 is raised as under:- The learned Assessing Officer further erred in holding that on the payment made to M/s DBM Geotechnics Construction Pvt. Ltd., TDS should have been deducted as per provisions of section 194J and not as per the provisions of section 194C of the Act. 5.1 It is observed by the AO that the contract was not simple works contract but was providing scientific and technical services coupled with consultancy. Such specialized service cannot be accomplished without involvement of professional caliber and merit. The services provided by M/s. DBM Geotechnics Construction Pvt. Ltd. are in the nature of professional services and therefore the assessee was liable to deduct TDS u/s.194J and not u/s.194C of the Act.

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5.2 In appeal, it is submitted as under:- 1) The Authority has made payment to DBM Geotechnics &. Construction Pvt. Ltd against contract for excavation of Rock from Mithi River on which the TDS is deducted as per the provisions of Section 194C of the Act. However as per the Assessing Officer, the TDS should have been deducted as per the provisions of section 194J and hence an order was passed u/s 201(1)/201(1A) and a demand was raised on account of Interest u/s 201(1A) of Rs. 9,71,931/- and 33,62,190/- for AY 2012-13 & 2013-14 respectively. Since DBM Geotechnics & Construction Pvt. Ltd has already included the amount paid to them in their return of income and paid the taxes thereon and evidence in respect to the same was filed before the AO, he has not raised the demand of the TDS amount but raised the demand only for the interest. 2) The similar issues were there in the AY 2008-09 & AY 2011-12. The assessee had preferred an appeal to the CIT(A). Further, the CIT(A) has upheld the order passed by AO that TDS should be deducted as per the provision of section 194J and not as per the provisions of section 194C for the two assessment years. 3) However, the assessee had filed an appeal before the Hon. ITAT for AY 2008-09 & AY 2011-12 which is still pending before the Tribunal The hearing for the two appeals has been fixed on 26-10-2016. 5.3 I have considered the facts of the case, AO's order, submission of the appellant. My Ld. Predecessor in the appellant's own case for AY 2008-09, vide her order dated 07.07.2014 has discussed the issue in detail and held as under:- 4.3 I have considered the facts of the case, submissions of the appellant, order giving appeal effect of the CIT(A) order and the order of my Ld. Predecessor. My Ld. Predecessor has set this issue to the file of the A.O to verify the correctness of the fact and accordingly take a decision holding inter-alia held as under:- "That if the contract to DBM Geotechnics Construction Pvt. Ltd. has been given for rock excavation work, the A.O. shall not treat the appellant to be in default and shall accordingly delete the demand raised. However, if as observed by the A.O. the contract is for marine geo-technical investigation for the purposes of rock excavation in Mithi river, the AO's decision in this regard shall be upheld" 4.4 I have perused the contract document filed by the appellant. The name of work for the contract is "Marine Geotechnical Investigation for Rock Excavation in Mithi River Approach Chanel". The nature of work defined in Schedule B is as under:- • Item No. 1 : Establish on site rotary core drilling rig and other equipments with mounted a floating craft, for sinking marine bore hole complete with all accessories and transport to the site fixing laying in position etc. complete and including demobilization.

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• Item No.2 : Move core drilling rig and other equipments mounted on floating craft with all accessories into position at first bore hole and from borehole to bore hole including accurate mounting of craft and jacking up at each bore hold, hire of tugs, survey work etc. complete. • Item NO.3 : Boring 1OOmm/ 150mm dia In all type of soils including boulders including use of all material such as csing peipe and accessories consumables etc. as required [including conveying the material to site of work] carrying out set at 1.5m. interval and taking undisturbed samples of cohesive soil, preparing the loose samples serially in glass/plastic jars, on site of work and conveying the same to Headquarters of concerned office as directed by Engineer-in-Charge. Includes geotechnical logging of the samples and carrying out field tests using pocket penetro meter and hands hear vane. • Item No.4 : Coring 'NX' size using triple tube core barrel of 100/150 mm as dia. In weathered and unweathered basalt rock by diamond drilling including preservation of cores in standard core box taking core photographs etc. complete. • Item No. 5 : Providing core boxes of Jungle wood of size 1.25 m X 0.55 m X 0.15m for preserving core samples with all fixtures to fastening handles locking arrangements with lock and key etc. complete. • Item No. 6 : Preparation of factual and interpretive report and submission of one copy draft report and six copies of final report along with C.D. Item No. 7 : Laboratory tests (i) Moisture content (ii) Specific gravity (iii) Consistency limits [L.L.P.L. S.L.] (iv) Gravel and fine sieve analysis (v) Hydro meter analysis (vi) Consolidation (vii) Direct shear test (viii) Triaxial (UU) (ix) UDS all above test ROCK SAMPLES: (x) Specific gravity (xi) Water absorption (xii) Porosity (xii) Crushing strength (xiv) Tensile Test (xv) Modulus of elasticity and Poissiori's Ratio (xvi) Chemical analysis of soil to determine chloride and sulphate content (xvii) Chemical analysis of ground water to determine chloride and Sulphate content and P.H. 4.5 Thus, from the above it is clear that the contract to DBM is not given for simple rock excavation work but it is given for 'Marine Geo Technical Investigation' for rock excavation in Mithi River. Therefore respectfully

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following the decision of my Ld. Predecessor, the action of the A.O. is upheld. Ground is dismissed. 5.4 Respectfully, following the decision of my Ld. Predecessor, the action of the AO holding the assessee as assessee-in-default for non- deduction of tax at source u/s 194J as against 194C in respect of payments made to M/s DBM Geotechnics Construction Pvt. Ltd. is upheld Ground is Dismissed. 6. For the AYs 2012-13 & 2013-14, the appellant has taken alternative ground vide Ground No. 3. Since it is held that the appellant was required to deduct the tax u/s 194J as against the 194C for the payments made towards M/s DBM Geotechnics Constructions Pvt. Ltd., the alternative ground taken by the appellant that the Interest u/s 201 (1A) should levied from the date of deduction to the date of filing return of income merits consideration. 6.1 It is evident from the provision of Section 201 (1A) itself that the interest is to be levied from the date on which such tax was deductible/ deducted to the date on which such tax is deducted/actually paid as the case may be. Hence, the interest u/s 201 (1A) is to be calculated from the date of deduction of tax till the date of deposit in government treasury and not from the beginning of the financial year and till the date of passing the order. The appellant is directed to file the copies of the challan of the tax deducted before the AO and the AO is directed to re-compute the interest u/s 201 (1A) of the Act. Ground is allowed.‖ 5. Aggrieved by the appellate order dated 12-05-2016 passed by the learned CIT(A), the assessee has come in an appeal before the tribunal and submitted that the matter is covered in favour of the assessee by the decision of the tribunal vide common order dated 30-01-2017 in ITA no. 6029/Mum/2014 for AY 2008-09, 6030/Mum/2014 and 5950/Mum/2014 AY 2011-12 respectively . It was submitted by learned counsel for the assessee that the order/contract awarded by the assessee in favour of DBM Geotechnics and Construction Private Limited for which payment was made by the assessee was for the construction of retaining wall alongwith bank of Mithi River for which two tenders documents are placed in paper book page 25-60 . It is the claim of the assessee that the tender was not for marine geotechnical investigation for rock excavation in Mithi River for which payments were made by the assessee to DBM Geotechnics and Construction Private Limited during the relevant period under consideration and learned CIT(A) mistook the tender/contract to be for marine geotechnical

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investigation for rock excavation in Mithi River while adjudicating appeal. It is pertinent to mention here that tribunal while adjudicating appeals vide common orders dated 30-01-2017 for AY 2008-09 and 2011-12 has held that payments to DBM Geotechnics Construction Private Limited towards tender for marine geotechnical investigation for rock excavation in Mithi River is covered by provisions of Section 194J so far as deductibility of income tax at source is concerned, while payments to DBM Geotechnics Construction Private Limited towards tender for construction of retaining wall along bank of Mithi River is covered by provisions of Section 194C as the assessee has awarded both the types of contract under tender to DBM Geotechnics Construction Private Limited . It was claimed that learned CIT(A) mistook the tender to be towards marine geotechnical investigation for rock excavation in Mithi River while infact the tender was for construction of retaining wall along bank of Mithi River for which payments were made by the assessee to DBM Geotechnics and Construction Private Limited during relevant period under consideration. It was submitted by learned counsel for the assessee that the matter can be verified by the AO and if contentions are found correct, the tribunal order can be followed accordingly and in any case the tribunal has adjudicated on both the types of tenders/contracts awared by assessee in favour of DBM Geotechnics and Construction Private Limited. The Ld. DR raised no objection if the matter is restored to the file of the AO for necessary verifications on merits as to the nature of the payments having been made to the tune of Rs. 7.59 crore to DBM Geotechnics Construction Pvt. Ltd. during relevant period for construction of retaining wall alongwith bank of Mithi River. 6. We have considered rival contentions and perused the material on record . We have observed that tribunal has taken a view to which one of us was a party (Ld. Accountant Member) in the appeals in ITA no. 6029/Mum/2014 for AY 2008-09, 6030/Mum/2014 and 5950/Mum/2014 for AY 2011-12 respectively wherein the tribunal has discussed and analysed both the types of tenders awarded by the assessee to DBM Geotechnics and Construction Private Limited in details on merits viz. Firstly tender/contract awarded by the assessee to DBM Geotechnics and Construction Private Limited for marine geotechnical investigation for rock excavation in Mithi River which was held to be covered under the provisions

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of Section 194J so far as deductibility of income tax at source is concerned while secondly tender/contract awarded by the assessee to DBM Geotechnics and Construction Private Limited for construction of retaining wall alongwith bank of Mithi River was held to be covered by provisions of Section 194C so far as deductibility of income tax at source is concerned . It is very important for the authorities below to correctly analyse as to against which tender the payments were made by the assessee to M/s DBM Geotechnics and Construction Private Limited during the relvant period to arrive at correct decision. The relevant paras of the aforesaid common order of the tribunal are extracted below which are para 8 and para 14 of the tribunal order dated 30-01-2017 with respect to the decision of tribunal as to both the types of tenders , which are reproduced as under:- “8. We have considered the rival contentions and also perused the material available on record. We have also carefully gone through the tender documents running from pages 39 to 145 in the paper book filed with the tribunal. We have observed that the tender was floated by the assessee for marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway . M/s DBM Geotechnics Construction Pvt. Ltd. was the successful bidder in the tender. We have observed that the tender was not floated for excavation of rocks in Mithi river rather the tender was for marine geotechnical investigation for rock excavation in Mithi river and the work was mainly towards rendering of technical services involving marine geotechnical investigation for rock excavation which were technical in nature which are covered u/s 194J of the Act for deduction of tax at source. The authorities below have rightly concluded that these services are technical services which are covered u/s 194J of the Act for deduction of tax at source and not u/s 194C of the Act for deduction of tax at source . We have also gone through the various items of work reflected in tender documents as contained inChapter VIII(e), schedule – B which are placed on record in paper book /page 139-142 and also detailed item wise specification in tender document placed in paper book/page 143- 145 , which clearly lead to the irresistible conclusion that these are technical services rendered by M/s DBM Geotechnics Construction Pvt. Ltd. to the assessee for ‗Marine Geo Technical Investogation‘. The learned AO vide orders dated 11-03-2013 in para 2 as well learned CIT(A) in his appellate orders dated 16-07-2014 in para 4.4/4.5 have rightly concluded that services rendered by M/s DBM Geotechnics Construction Pvt. Ltd. to the assessee are technical in nature and duly covered u/s 194J of the Act for deductibility of tax at source, which orders of the authorities below we are not inclined to interfere. In our considered view theseare technical services rendered by the DBM Geotechnics Construction Pvt. Ltd. to the assessee for ‗Marine Geo Technical Investigation for which payments were made by the assessee which are covered u/s 194 J of the Act for deductibility of tax at source. Section 194J of the Act as applicable for impugned assessment year is reproduced below:- [Fees for professional or technical services. 194J.(1) Any person, not being an individual or a Hinduundivided family, who is responsible for paying to a resident any sum by way of— 12

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(a) fees for professional services, or (b) fees for technical services, [or] [(c) royalty, or (d)any sum referred to in clause (va)of section 28,] shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to [ten]per cent of such sum as income-tax on income comprised therein : Provided that no deduction shall be made under this section- (A) from any sums as aforesaid credited or paid before the 1st day of July, 1995; or (B) where the amount of such sum or, as the case may be, the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed— (i) twenty thousand rupees, in the case of fees forprofessional services referred to in clause (a), or (ii) twenty thousand rupees, in the case of fees for technical services referred to in [clause (b), or] [(iii) twenty thousand rupees, in the case of royalty referred to in clause (c), or (iv) twenty thousand rupees, in the case of sum referred to in clause (d):] [Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum by way of fees for professional services or technical services is credited or paid, shall be liable to deduct income-tax under this section :] [Provided also that no individual or a Hindu undivided family referred to in the second proviso shall be liable to deduct income-tax on the sum by way of fees for professional services in case such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family.] (2) [***] (3) [***] Explanation.—For the purposes of this section,— (a) ―professional services‖ means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AAor of this section; (b) ―fees for technical services‖ shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; [(ba)―royalty‖ shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;] (c) where any sum referred to in sub-section (1) is credited to any account, whether called ―suspense account‖ or by any other name, in the books of account of the person liable to pay such sum, such crediting shall be deemed to be credit of such sum to the account of the payee and the provisions of this section shall apply accordingly.

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The fee for technical services has been defined in in Explanation 2 to clause (vii) of sub-section (1) of section 9; which is reproduced hereunder:- ―Explanation [2].—For the 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‖.]‖ In our considered view these are technical services rendered by the DBM Geotechnics Construction Pvt. Ltd. to the assessee for ‗Marine Geo Technical Investigation for which payments were made by the assessee which are covered u/s 194 J of the Act for deductibility of tax at source. The decision of the Hon‘ble Gujarat High Court in the case of Essar Oil Ltd. V. ITO [2013] 30 taxmann.com 39 (Guj HC) as relied upon by the assessee is distinguishable and not applicable in the instant case as in that case three different agreements entered into by the tax-payer were held to be composite contract being held to be single integrated agreement for construction of refinery plant which was held to be work contract liable for deduction of tax at source u/s 194C of the Act . However, the assessee has placed on record Form 26A to contend that the amount received has been duly considered in the return of income filed by M/s DBM Geotechnics Construction Pvt. Ltd. and all taxes were duly paid by the said M/s DBM Geotechnics Construction Pvt. Ltd. to the Revenue . This contention of the assessee needs verification by the authorities below and we are inclined to set aside this issue to the file of the AO for verification and if the contention of the assesee are found to be correct, the AO shall grant relief keeping in view ratio of decision of Hon‘ble Supreme Court in the case of Hindustan Coca-Cola Beverages Private Limited (supra) 293 ITR 226(SC). The assessee is directed to appear before the AO and file necessary evidences to support its contentions, as per our above direction . Needless to say that proper and adequate opportunity of being heard shall be provided by the AO in accordance with principles ofnatural justice in accordance with law. This appeal is partly allowed for statistical purposes.We order accordingly. ― “14. We have considered the rival submission and also perused the material available on record. We have observed that the assessee has paid an amount of Rs. 32,47,68,465/ - to M/ s DBM Geotechnics Construction Pvt. during the previous year relevant to the assessment year 2011-12 on which tax was deducted at source u/s 194C of the Act by the assessee. The assessee has contended that the authorities below have framed the orders based on evaluation of a wrong tenders/order which was also awarded to the assessee earlier being marine geotechnical investigation for rock excavation in Mithiriver approach channel (2.14 Km) situated at sea side of Mahim causeway of which work was completed way back in the previous year relevant to the assessment year 2008-09. Thus, the assessee admitted its mistake of submitting wrong tender documents before the authorities below for evaluation of the applicability of Section 194C of the Act vis-à-vis payments made. It is also seen that further fresh tenders were awarded by the assessee to M/s DBM Geotechnics Construction Pvt Ltd. for the construction of retaining wall along the bank of Mithi river from channel 3500.0m to channel 5883.0m towards LBS Marg including Service road and construction of retaining wall

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along the bank of Mithi river from channel 2600.0m to channel5883.0 m towards BKC side including service road , which are placed as additional evidences before the tribunal(page 221-516 and it is claimed that the payment has been made by the assessee of Rs. 32,47,68,465/- to DBM Geotechnics Construction Private Limited towards these tenders viz. for the construction of retaining wall along the bank of Mithi river from channel 3500.0m to channel 5883.0m towards LBS Marg including Service road and construction of retaining wall along the bank of Mithi river from channel 2600.0m to channel 5883.0m towards BKC side including service road and not towards the earlier tender i.e. marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway which was stated to be completed in the previous year relevant to the assessment year 2008-09. These new tenders are now placed as additional evidences before the tribunal (page 221-516/pb) which in our considered view goes to the root of matter and in the interest of substantial justice these additional evidences need to be admitted as we have also observed that the authorities below erred in passing the orders by relying on the earlier tender viz. tender for marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway which was a small order stated to be completed in the previous year relevant to the assessment year 2008-09. However, these additional evidences placed in paper book page 221-516 needs verification by the A.O. and accordingly we set aside this matter to the file of the A.O. for redetermination of the issue on merits after evaluation of the tender documents and co-relating the same with the payments made by the assessee. Needless to say that proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law and the assessee be allowed to submit evidences and explanations to support its contentions in its defense. Thus, this appeal is allowed for statistical purposes. We order accordingly.‖ Thus, the AO is directed to verify and evaluate the tender/contracts under which the payments were made by the assessee to DBM Geotechnics Construction Private Limited during the relevant period to the tune of Rs.7,59,32,109/- and if the payments were found to be made by the assessee to DBM Geotechnics and Construction Private Limited for the construction of the retaining wall alongwith the bank of Mithi River , then the provision of section 194C shall be applicable so far as deductibility of income tax at source is concerned, while if the payments were made by the assessee to DBM Geotechnics and Construction Private Limited towards marine geotechnical investigation for rock excavation, then provisions of Section 194J will be applicable so far as deductibility of income-tax at source is concerned, as was held by the tribunal vide afore-stated common orders dated 30-01-2017 for AY 2008-09 and 2011-12. Needless to say that proper and adequate opportunity of being heard shall be provided by the AO to the assessee in set aside proceedings in accordance with principles of natural

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justice in accordance with law and the assessee will be allowed to submit evidences and explanations to support its contentions in its defence which shall be evaluated by the AO on merits. Thus, the appeal of the assessee in ITA no. 5186//Mum/2016 for AY 2012-13 is allowed for statistical purposes. We order accordingly 7. In the result appeal of the assessee in ITA no. 5186/Mum/2016 for AY 2012-13 is allowed for statistical purposes. 8. Our above decision in ITA no. 5186/Mum/2016 for AY 2012-13 shall apply mutatis mutandis to the appeal of the assessee in ITA no. 5187/Mum/2016 for AY 2013-14 . Thus, the appeal of the assessee in ITA no. 5187/Mum/2016 for AY 2013-14 is also allowed for statistical purposes. We order accordingly. 9. In the result appeal of the assessee in ITA no. 5187/Mum/2016 for AY 2013-14 is allowed for statistical purposes. 10. In the result both the appeals of the assessee in ITA No. 5186/Mum/2016 and 5187/Mum/2016 for AY 2012-13 and 2013-14 respectively are allowed for statistical purposes. Order pronounced in the open court on 07.02.2018 आदेश की घोषणा खुऱे न्यायाऱय में ददनांकः 07.02.2018 को की गई । Sd/- Sd/-

(MAHAVIR SINGH ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, dated: 07.02.2018 Nishant Verma Sr. Private Secretary copy to… 1. The appellant 2. The Respondent 3. The CIT(A) – Concerned, Mumbai 4. The CIT- Concerned, Mumbai 5. The DR Bench, 6. Master File 16

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// Tue copy// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI