Income Tax Appellate Tribunal - Ahmedabad
Torrent Pharmaceuticals Ltd.,, ... vs The Dy.Cit, Tds Circle,, Ahmedabad on 28 March, 2018
ITA No.2671/Ahd/2014
Assessment Year: 2012-13
Page 1 of 3
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD 'B' BENCH, AHMEDABAD
[Coram: Pramod Kumar AM and S S Godara JM]
ITA No.2671/Ahd/2014
Assessment year: 2012-13
Torrent Pharmaceuticals Ltd., ..............................Appellant
Torrent House,
Off Ashram Road,
Ahmedabad - 380 009.
[PAN : AAACT 5456 A]
Vs.
Deputy Commissioner of Income Tax,
TDS Circle, Ahmedabad. ............................Respondent
Appearances by
P.M. Mehta for the appellant
Mudit Nagpal for the respondent
Hearing concluded on: 04.01.2018
Order pronounced on : 28.03.2018
O R D E R
Per Pramod Kumar, AM:
1. This appeal challenges learned CIT(A)'s order dated 22.07.2014 upholding tax withholding demand and interest thereon, under section 201(1) and 201(1A) respectively, of the Income Tax Act 1961 ('the Act' hereinafter), for the assessment year 2012-13.
2. Grievances of the assessee, in substance, is that the CIT(A) erred in upholding demand of Rs.1,87,440/- raised on the assessee under section 201 r.w.s. 194J of the Act.
3. The assessee is engaged in the business of manufacturing drugs and pharmaceutical formulations. The assessee had made a payment of Rs.21,00,000/- to Gujarat Enviro Protection and Infrastructure Limited for disposal of hazardous waste as per the rules and procedure laid down, and duly deducted tax at source under section 194C from the said payment. The Assessing Officer (TDS) was, however, of the view that since the work is of such a nature that it essentially involves rendition of Technical ITA No.2671/Ahd/2014 Assessment Year: 2012-13 Page 2 of 3 Services and "specific technical job". He was of the view that Gujarat Enviro Protection & Infrastructure Limited (GEPIL) has created specific facilities for storage of hazardous waste at Surat, that GEPIL is specifically approved by Gujarat Pollution Control Board and that the amount paid per metric tonne also suggests that the work required very high specialised skills, Technology and expertise. On this basis, a demand, for short deduction of tax at source, was raised. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success.
4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.
5. It is not even in dispute that the amount paid to GEPIL is for the work done, rather than the rendition of services simplicitor, and the agreement, extracts from which are extensively reproduced by the authorities below, also unambiguously demonstrates that. The charges payable to GEPIL are for "treatment, disposal and transportation". It is not, therefore, an arrangement for rendition of any services by GEPIL. It is an agreement for certain work to be done by GEPIL which involves certain technical and specialised skills, but then mere involvement of such skills would not take the work out of the ambit of section 194C. The deductibility of tax under section 194J would come into play only when the payment is for "fees for technical services" and not for work done, which required specialised skills. By no stretch of logic, in our considered view, the payment made by the assessee can be treated as a payment of fees for technical services.
6. In the light of the above discussions, as also bearing in mind entirety of the case, we hold that the tax deduction at source liability of the assessee was only under section 194C which was duly discharged by the assessee. Accordingly, impugned demands under section 201(1) and 201(1A) are devoid of leally sustainable basis. We vacate the impugned tax withholding and interest demands.
7. In the result, the appeal is allowed in the terms indicated above. Pronounced in the open Court on this 28th day of March, 2018.
Sd/- Sd/- S S Godara Pramod Kumar (Judicial Member) (Accountant Member) Dated: 28 th March, 2018 PBN/* ITA No.2671/Ahd/2014 Assessment Year: 2012-13 Page 3 of 3 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad