Commissioner of Income Tax, vs. Agricultural Market committee,

-1- IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR ------------------------------------------------------ (1) D.B. Income Tax Appeal No.422/2011 Commissioner of Income Tax Vs. Principal Officer JVVNL (2) D.B. Income Tax Appeal No.452/2011 Commissioner of Income Tax Vs. Principal Officer JVVNL

(3) D.B. Income Tax Appeal No.559/2011 Commissioner of Income Tax Vs. Principal Officer JVVNL

(4) D.B. Income Tax Appeal No.594/2011 Commissioner of Income Tax Vs. Principal Officer JVVNL

(5) D.B. Income Tax Appeal No.646/2011 Commissioner of Income Tax (TDS) Vs. Principal Officer JVVNL Date of order : 19.10.2016 HON'BLE MR.K.S. JHAVERI,J. HON'BLE MR.MAHENDRA MAHESHWARI,J. Mr. R.B. Mathur, for the appellant. Mr. Sanjay Jhanwar, for respondent. JUDGMENT --------- 1. By way of these appeals, the department has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the assessee and has held that the assessee is not required to deduct TDS. 2. While admitting the matter following questions were framed:- 1. Whether Tribunal was justified in holding that the payment made by the assessee in form of transmission/ wheeling/ SLDC charges were not liable to be deducted at source either under Section 194J or 194C of the Income Tax Act? 2. Whether Tribunal was justified in holding

-2- that on the facts found, provisions of Section 194J or 194C of the Act are not attracted or in other words, the case of the assessee does not fall within four corners of the twin sections. 3. Whether Tribunal was justified in holding that assessee was not liable to pay interest u/s. 201 (1A) of the Act?” 3. Counsel for the appellant relied on the provisions of Section 194C and 194J which reads as under :- 194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor85) for carrying out any work85 (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor 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— (i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. (2) 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 income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. (3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source— (i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or (ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice. (4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (5) No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor,

-3- if such sum does not exceed 86[thirty] thousand rupees

194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of— (a) fees for professional services, or (b) fees for technical services26, 27[or] [(ba) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a company, 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 29[ten] per cent of such sum as income-tax on income comprised therein “ 4. The assessee was bound to deduct TDS in lieu of services received by them and for the services received by them was liable to pay tax within the meaning of Explanation 2 to Section 9(1)(vii) of the Act. 5. However counsel for the respondent Mr. Jhanwar contended that the issue is concluded in view of the following decisions : 1. Commissioner of Income Tax Vs. Bharti Cellular Ltd. (2011) 330 ITR 239 (SC), 2. Union of India Vs. Satish Panalal Shah (2001) 249 ITR 221 (SC), 3. Commissioner of Income Tax Vs. Jaipur Vidyut Vitran Nigam Ltd. D.B. ITA No. 579/2009, High Court of Judicature for Rajasthan, Jaipur 4. Commissioner of Income Tax Vs Bharti Cellular Ltd (2009) 319 ITR 139 (Del.), 5. Skycell Communications Ltd. and Anr. Vs Deputy Commissioner of Income Tax and Ors. (2001) 251 ItR 53 (MAD.), 6. M.S. Jewellery Vs. Assistant Commissioner (ASSESSMENT) Agricultural Income Tax and Sales Tax and Anr. (1994) 208 ITR 531 (KER.), 7. CIT vs. Maharashtra State Electricity Distribution Co. Ltd., (2015) 119 DTR (BOM) 278, 8. Commissioner of Income Tax-II and Ors. Vs Delhi Transport Ltd. Manu/ DE/ 2199/2015. 6. We have heard learned counsel for the parties. 7. In view of the fact that issue is concluded by

-4- decision of Bombay High Court and Delhi High Court and SLP against the same has been dismissed. In that view of the matter the issues are required to be answered in favour of the assessee against the department. 8. Consequently, all the appeals are dismissed. A copy of this judgment be placed in each file. (Mahendra Maheshwari),J. (K.S. Jhaveri),J. BM Gandhi/ 72-76 BM Gandhi/ 72-76