Income Tax Appellate Tribunal - Lucknow
Dy. Commissioner Of Income Tax, Lucknow vs M/S Madhyanchal Vidyut Vitran Nigam ... on 19 March, 2018
I.T.A. No.208/Lkw/2017
1
Assessment Year:2010-11
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH 'A', LUCKNOW
BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND
SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER
ITA No.208/Lkw/2017
Assessment Year:2010-11
Dy.C.I.T., Vs. M/s Madhyanchal Vidyut Vitran
Range-4, Nigam Ltd.,
Lucknow. 4A, Gokhley Marg,
Lucknow.
PAN:AAECM 0108 J
(Appellant) (Respondent)
Appellant by Shri J. S. Minhas, CIT, D.R.
Respondent by Shri Sandeep Kumar, F.C.A.
Date of hearing 15/03/2018
Date of pronouncement 19/03/2018
ORDER
PER T. S. KAPOOR, A.M.
This is an appeal filed by the Revenue against the order of CIT(A), Lucknow dated 30/01/2017 relating to assessment year 2010-11 taking the following grounds of appeal:
"1. The CIT (A) has erred in law and on facts in deleting the addition made by the Assessing Officer of Rs.1,21,62,56,706/- u/s 40(a)(ia) of the I.T. Act, 1961 ignoring the fact that the assessee failed to deduct tax at source u/s 194J of the I T. Act,1961 on these payments.
2. The CIT (A) has erred in law and on facts in deleting the addition made by the Assessing Officer of Rs.1,21,62,56,706/- u/s 40(a)(ia) of the IT.Act,1961 ignoring the fact that the transmission charges paid by the assessee were in the nature of I.T.A. No.208/Lkw/2017 2 Assessment Year:2010-11 fees for technical services as held by the Advance Ruling made in the case A.A.R. No 1012 of 2010 in which it has been held that similar charges received by Rajasthan Rajya Vidyut Prasaran Nigam Ltd. were in the nature of fees for technical services and liable to deduction of tax at source u/s 194J of the IT. Act, 1961."
2. At the outset, Learned D. R. fairly admitted that the appeal filed by Revenue is duly covered in favour of the assessee by the order of the Tribunal in the case of the assessee itself for assessment year 2008-09 and 2009-10. Learned A. R. stated that Hon'ble Allahabad High Court in assessee's own case for assessment year 2008-09 has dismissed the appeal filed by the Revenue against the order of the Tribunal. Learned A. R. submitted that exactly similar grounds were taken by the Revenue in earlier years and the same have been decided in favour of the assessee. Learned A. R. stated that the Tribunal order for assessment year 2008-09 and 2009- 10 are placed at pages 44 to 71 of the paper book whereas the order of Hon'ble Allahabad High Court is placed at pages 72 to 82 of the paper book. It was further submitted that in assessment year 2014-15 and 2015-16 the Assessing Officer himself did not make any disallowance for these payments and the copies of the orders are placed at pages 83 to 88 of the paper book.
3. We have heard the rival parties and have gone through the material placed on record. We find that during assessment year 2008-09 the following grounds were taken:
1. The CIT(A) has erred in law and on facts in deleting the addition made by the A.O. of Rs.1,65,32,88,040/- U/s 40a(ia) as the assessee failed to deduct tax at source u/s 194J of the I.T. Act. He failed to appreciate that transmission charges paid by the assessee were in the nature of fees for technical services in the hands of the recipients such payments were therefore liable for TDS u/s 194J of the I.T. Act.
I.T.A. No.208/Lkw/2017 3 Assessment Year:2010-11
2. The CIT(A) has erred in law and on facts of the case in failing to take into account the Advance Ruling made by Hon'ble Justice Mr. P.K. Balasubramanyan in his ruling AAR no. 1012 of 2010 in which he has held that similar charges received by Rajasthan Rajya Vidyut Prasaran Nigam Ltd., were in the nature of fees for technical services and liable to TDS u/s 194J of the I.T. Act.
3.1 These grounds are exactly verbatim same as have been taken in the year under consideration. The Tribunal has dismissed the appeal filed by the Revenue under similar circumstances by holding as under:
"11. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below and the judgments referred to by the parties and material available on record, we find that undisputedly assessee is wholly owned company of Government of Uttar Pradesh. It is a public utility company engaged in the distribution of electricity. The assessee purchased power for distribution to consumers from its holding company, UPPCL, which is also a wholly owned company of Government of Uttar Pradesh. The power is purchased at the rate fixed by UPERC. During the year under consideration, the assessee made payment to UPPCL under two heads, namely power purchase tariff and power transmission tariff. The payment of power transmission charges or wheeling charges is in the nature of reimbursement of cost, as the transmission charges can be construed to be the cost incurred in transmission of power from the end of UPPCL to the end of the assessee and thereafter the power is used by the consumers. The transmission charges are also paid at the rate fixed by the UPERC. The ld. CIT(A) has given a categorical finding that in fixing such charges, nothing is brought on record to show that there is an element of profit to the UPPCL to whom payment is made. These findings of the ld. CIT(A) have not been dislodged by the Department by placing any evidence on record. It is also evident from the record that though the payment of transmission charges are not directly made to the UPTCL, a transmission licensee, but it was always made through UPPCL, to whom the entire payment was made by the assessee with respect to the power purchase tariff and power transmission tariff. Through various adjustment sheets, the transmission charges were transferred by UPPCL in I.T.A. No.208/Lkw/2017 4 Assessment Year:2010-11 favour of UPPTCL. In all these memorandum of adjustment appearing at pages 1 to 20 of the compilation of the assessee, transmission and all the wheeling charges payable to UPPTCL by the assessee-company were adjusted. The short question arises before us is whether the payment of transmission charges to UPPTCL through UPPCL is a payment of fee for technical services as per Explanation 2 to section 9(1)(vii) of the Act. According to the assessee, it was only a reimbursement of cost of transmission charges incurred by UPPTCL, therefore, there was no element of profit in these payments and provisions of section 194J of the Act cannot be attracted. It is also a case of the assessee that no technical services were rendered for the assessee. Whatever sophisticated equipments were used and maintained by the technical staff were of UPPTCL and the assessee simply get electricity transmitted from these sophisticated equipments for its transmission from the end of UPPCL to the end of the assessee whereafter the power is transmitted for use by the consumers.
12. Identical issue was raised before different Benches of the Tribunal in different cases and all the Benches of the Tribunal have taken a consistent view that the provisions of deduction of tax at source does not apply on actual reimbursement, therefore, there is no liability to deduct tax at source on payment of transmission/wheeling/SLDC charges under section 194J of the Act or for that matter under section 194C of the Act. It was also held that the payment could not be disallowed under section 40(a)(ia) of the Act, as the said provision applies only when payment is payable i.e. due; whereas the assessee has made actual payment of reimbursement. The ld. CIT(A) has examined the issue in the light of the order of the Tribunal in the case of Bangalore Electric Supply vs. I.T.O; Maharashtra State Electricity vs. I.T.O. and Jaipur Vidyut Vitran Nigam Limited vs. DCIT and has finally concluded that there is no human interference involved in transmission of power from the end of UPPCL to the end of the assessee. The ld. CIT(A) has also concluded that there is no liability of TDS on payment of transmission charges under section 194J of the Act, therefore, disallowance under section 40(a)(ia) of the Act is not justified. For the sake of reference, we extract the relevant portion of the order of the ld. CIT(A) as under:-
I.T.A. No.208/Lkw/2017 5 Assessment Year:2010-11 "4(2) I have examined the facts and circumstances of the case. I have considered the findings of the AO and the submissions of the appellant. The appellant is a wholly owned company of the Government of UP. It is a public utility company engaged in the distribution of electricity. The appellant purchases power for distribution to consumers from its holding company which is UPPCL, which is also a wholly owned company of the Government of UP. The purchase of power is at rates fixed by UPERC. During the year under consideration the appellant made payments to UPPCL under two heads namely, power purchase tariff and power transmission tariff. The payment for power transmission charges or wheeling charges was in the opinion of the AO liable for deduction of TDS under section 194J of the Act as it was construed to be a payment in the nature of technical services. The issue is therefore whether the payment is disallowable under section 40(a)(ia) of the Act. 4(3)(i) First and foremost point to consider is that the payment for power transmission charges or wheeling charges is in the nature of reimbursement of cost. The transmissions charges can be construed to be the cost incurred in transmission of power from the end of UPPCL to the end of the appellant where after the power is transmitted for use by the consumers. The transmission charges are paid at rates fixed by the UPERC. In fixing such charges, nothing is brought on record to show that there is an element of profit to the UPPCL to whom the payment is paid, Since the payment is in reality the reimbursement at rates fixed by UPERC, I am of the opinion that the provisions of section .194J of the Act are not applicable. Further, in order to determine the applicability of section 194J of the Act a reference may be made to the decision of Hon'ble ITAT, Banglore in the case of Banglore Electric Supply Vs 1TO dated 16.03.2012 wherein the Hon'ble Court provided as under
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We have already pointed out that the expression 'fees for technical services' as appearing in section 194J of the said Act has the same meaning as given to the expression in Expln. 2 to section 9(( viz) of the said Act. In the said Explanation the expression 'fees for technical services' means any consideration I.T.A. No.208/Lkw/2017 6 Assessment Year:2010-11 for rendering of any 'managerial, technical or consultancy services'. The word 'technical' is preceded by the word 'managerial1 and succeeded by the word consultancy1. Since the expression 'technical services' is in doubt and is unclear, the rule of noscitur a sociis is clearly applicable. The said rule is explained in Maxwell on The Interpretation of Statutes (Twelfth Edition) in the following words: Where two or more words which are susceptible of analogous meaning are coupled together, noscitur a sociis, they are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general. This would mean that the word 'technical' would take colour from the words 'managerial' and 'consultancy' between which it is sandwiched. The word 'managerial' has been defined in the Shorter Oxford English Dictionary, Fifth Edition as: Of pertaining to, or characteristic of a manager of or within an organization, business, establishment, etc. The word 'manager' has been defined, inter alia, as: A person whose office it is to manage an organization, business establishment, or public institution, or part of one; a person with the primarily executive or supervisory function within an organization etc.; a person controlling the activities of a person or team in sports, entertainment, etc. It is therefore, clear that a managerial service would be one which pertains to or has the characteristic of a manager. It is obvious that the expression 'manager' and consequently 'managerial service' has a definite human element attached to it. To put it bluntly, a machine cannot be a manager.
Similarly, the word 'consultancy' has been defined in the said dictionary as 'the work or position of a consultant; a Department of consultants'. 'Consultant' itself has been defined, inter alia, as 'a person who gives professional advice or services in a specialized field'. It is obvious that the word 'consultant' is a derivative of the word 'consult' which entails deliberations, consideration, conferring I.T.A. No.208/Lkw/2017 7 Assessment Year:2010-11 with someone, conferring about or upon a matter. Consult has also been defined in the said dictionary as 'ask advice for, seek counsel or a professional opinion from; refer to (a source of information); seek permission or approval from for a proposed action'. It is obvious that the service also necessarily entails human intervention. The consultant, who provides the consultancy service, has to be a human being. A machine cannot be regarded as a consultant.
From the above discussion, it is apparent that both the words 'managerial1 and 'consultancy' involve a human element. And, both, managerial service and consultancy service, are provided by humans. Consequently, applying the rule of noscitur a sociis, the word 'technical' as appearing in Expln. 2 to section 9(i)(viz) would also have to be construed as involving a human element. But, the facility provided by MTNL/other companies for interconnection/port access is one which is provided automatically by machines. It Is Independently provided by the use of technology and that too, sophisticated technology, but that does not mean that MTNL/other companies which provide such facilities are rendering any technical services as contemplated in Expln. 2 to section 9(1 )(vn) of the said Act. This is so because the expression 'technical services' takes colour from the expressions 'managerial services' and 'consultancy services' which necessarily involve a human element or, what is now a days fashionably called, human interface. In the facts of the present appeals, the services rendered qua interconnection/port access do not involve any human interface and, therefore, the same cannot be regarded as 'technical services' as contemplated under section 194J of the said Act. 4(3)(ii) In view of the above, it could be said that the technical staff by operating and maintaining its grid stations and transmissions lines simply discharge their functions and do not render any technical service to the assessee, therefore, section 194J of the Act does not apply. Similarly, the Hon'ble ITAT, Mumbai Bench in the I.T.A. No.208/Lkw/2017 8 Assessment Year:2010-11 case of Maharashtra State Electricity Vs ITO dated 27.06.2012 held that -
It may be mentioned here that the applicability of section 194J and also sec. 194C was examined by the coordinate Bench of the Tribunal in the case of Jaipur Vidyut Vitaran Nigam Ltd (supra) and it has been the contention of the assessee that the agreement in that case also contain similar terms and the facts are also similar. This contention of the assessee has not been controverted by the revenue by specifically pointing out that there was any major difference between the terms of the agreement considered in that case and the terms of contract in the present case as well as in the facts of both the cases. It has been categorically held in the said case that there was no liability on the assessee to deduct tax on the payments of transmission/wheeling and SLDC charges u/s 194J. No contrary decision has been brought to our notice in which it has been held that tax on such charges is deductible under either of the sections viz 19C, 194J; 194 I of the Act.
4(3)(iii) A reference may also be made to the decision of Hon'ble ITAT, Jaipur in the case of Jaipur Vidyut Vitran Nigam Limited Vs DCIT (2009) 123 TTJ 888/ (2009) 26 DTR 79 wherein it was laid down that there was no liability to deduct IDS on payment of transmission charges under section 194J or section 194C of the Act. 4(4) in view of discussion above, I find that there is no human interference involved in transmission of power from the end of UPPCL to the end of the appellant. No such finding has been arrived at by the AO. Respectfully following the decisions cited supra, I am of the considered opinion that there is no liability of IDS on payment of transmission charges under section 194J of the Act. The disallowance under section 40(a)(ia) of the Act is therefore not justified. The addition of Rs.165,32,88,040/- made by the Assessing Officer under section 40(a)(ia) of the Act is deleted giving consequent relief to the appellant."
I.T.A. No.208/Lkw/2017 9 Assessment Year:2010-11
13. Our attention was also invited to the order of the Jaipur Bench of the Tribunal in the case of Jaipur Vidyut Vitran Nigam Ltd. vs. DCIT (supra), in which identical issue was raised and the Tribunal vide its order dated 30.4.2009 held that there is force in the alternate argument of authorized representative that the payment of transmission/wheeling/SLDC charges is reimbursement of the cost, as the tariff is fixed by an independent regulatory body i.e. Rajasthan Electricity Regulatory commission. The transmission company is not allowed any return on its capital. The tariff is determined on the principle of no profit no loss basis. The tariff is fixed by estimating the actual cost of operation of RVPN. It was also held in that judgment that in case on the basis of such tariff any surplus is left with RVPN, they give credit of the same to the assessee as evident from the extract of the minutes of the Board and copy of the journal voucher by which such credit is given to the assessee. Thus, when no income is paid by the assessee to transmission company, the question of deduction of tax at source does not otherwise arise even when under certain section of Chapter XVII-B liability of TDS is on payment of any sum and under certain sections, it is on payment of income as ultimately the tax is on the income and deduction of tax at source is only one of the modes of collection and recovery of the tax. It was further held that on actual reimbursement, provision of deduction of tax at source would not apply. So far as rendering technical services are concerned, the Tribunal has held in that case that no scientific knowledge, experience or skill is made available/rendered by RVPN to the assessee. The assessee itself has its own engineers and technicians who consistently monitor and supervise the flow of the electricity to its system and ultimate supply to its customer. The function of SLDC as regulator and controller for optimum scheduling and dispatch of electricity, and supervision over the intra-State transmission system is statutory function which is also entrusted to RVPN and therefore, RVPN by discharging such statutory function does not provide any technical service. Therefore, there is no liability to deduct tax at source on payment of transmission/wheeling/SLDC charges under section 194J of the Act.
14. In the case of Chattisgarh State Electricity Board vs. Income Tax Officer (supra), the Tribunal again held that transmission lines are in the physical control of PGCIL, these I.T.A. No.208/Lkw/2017 10 Assessment Year:2010-11 are maintained and operated by it. So far as the assessee is concerned, its interest in the transmission lines is restricted to the fact that electrical power purchased by the assessee, simultaneously with other bulk power beneficiaries, is transmitted through these transmission lines. The assessee has no control over the operations of the transmission lines, and all that it gets from the arrangements is that it can draw the electrical power purchased from PGCIL's transmission lines in an agreed manner. The Tribunal accordingly held that there is no application of provisions of section 194I of the Act to the impugned payments for transmission of electricity. The relevant observations of the Tribunal are extracted hereunder for the sake of reference:-
"The power purchase agreement entered into by the assessee with NTPC specifically provides that "power shall be made available by the NTPC at the busbars of the station and it shall be obligation and responsibility of the CSEB to make the required arrangement for evacuation of power from such delivery points of NTPC".
It is pursuant to these obligations that the assessee, along with other bulk power beneficiaries has entered into a 'bulk power transmission agreement' with PGCIL. This agreement provides that "Powergrid shall operate and maintain the transmission system belonging to it in the western region as per agreed guidelines and the directives of the Western Regional Electricity Board and the regional load dispatch centers, and co-operate with the bulk power beneficiaries of the region, so as to maintain the system parameters within acceptable/ reasonable limits except where it is necessary to take measures to prevent imminent damage to any equipment". In respect of these services, the bulk power beneficiaries are to pay to PGCIL a monthly charge computed in the manner set out in cl. 9 of the said agreement. This clause, in turn, refers to formula set out in A. 4 of Annex. 1 which refers to the same ratio of agreed annual charges divided by 12 as is between power transmitted to each beneficiary to total sales from that particular point of delivery. In other words, while the annual charges are fixed, these are divided between the beneficiaries in the same ratio as is ratio of power evacuated by a beneficiary to the total sale of power from that delivery point. It is, however, not in dispute that the transmission lines are in the physical control of I.T.A. No.208/Lkw/2017 11 Assessment Year:2010-11 PGCIL, these are maintained and operated by the PGCIL and, so far as the assessee is concerned, its interest in the transmission lines is restricted to the fact that electrical power purchased by the assessee, simultaneously along with electrical power purchased by other bulk power beneficiaries, is transmitted through these transmission lines.
Explanation (i) to s. 194-I defines rent as any payment, by whatever name called, under any lease, sub-lease, or tenancy or any other agreement or arrangement "for the use of" ,and, building, plant, machinery or equipment etc. As evident from a plain reading of the agreements under which impugned payments have been made, the payments have been 1 'made for the services of transmission of electricity and not the use of transmission wires ner se. It is a significant fact that these transmission lines are not only being used for transmission of electricity to the assessee but also for transmission of electricity to various other entities. The transmission lines continue to be not only under control and possession of the PGCIL in legal terms, but, what is more important, these transmission lines are effectively in the control of PGCIL, without any involvement of the assessee in actual operations of the same. On these facts, the assessee has made the payments for transmission of electricity in which transmission lines have been used rather than for the use of transmission lines per se. The payments could be said to have been made for "the use of transmission lines" in a case in which the object of consideration for which payments are made was the use of transmission lines simpliciter, and such a use by the assessee does not extend beyond the transmission of electricity through such lines in the sense that the same transmission lines continue to be in the control of PGCIL for transmission of electricity for other entities and for all practical purposes. Even as electricity purchased by the assessee is transmitted to the assessee from the NTPC busbar to its landing points, the same transmission lines continue to be engaged in similar transmission of electricity for other entities and the assessee has no say in the manner in which such transmission lines can be controlled and used by the PGCIL. Undoubtedly, for the purpose of an arrangement I.T.A. No.208/Lkw/2017 12 Assessment Year:2010-11 being termed as in the nature of rent for the purpose of s. 194-I, the control and 'possession', in legal terms, of an asset may not needed to be with the person benefiting from the asset in question, it is a condition precedent for invoking s. 194-I that the asset, for the use of which the payment in question is made, should have some element of its control by the assessee. Here is a of tax at source on his part and, in addition to this lapse, the recipient of income has also failed to pay such tax directly. The reasons are not difficult to fathom. Proceedings under s. 201(1) are not penal proceedings. These are vicarious proceedings to make good the shortfall in tax collection, and when the tax liability is duly discharged by the recipient of income embedded in the payment, such a vicarious liability cannot be invoked. Unlike s. 271C, s. 201(1) is not of the penalty nature, and, therefore, the core consideration for invoking s. 201(1) is not the lapse on the part of the tax deductor, but loss of revenue to the exchequer. As long as taxes payable by the recipient of income are paid, the provisions of s. 201(1) cannot be pressed into service. The authorities below were thus quite unjustified in brushing aside the assessee's contentions to the effect that since PGCIL has already discharged all its income-tax obligations, demands under s. 201(1) cannot be raised at all. However, now that it is held, on merits, that payments made for transmission of electricity by the transmission lines owned by PGCIL do not constitute payments for rent under s. 194-I, it is not really necessary to go into this aspect of the matter."
15. In the case of Gridco Ltd. vs. ACIT (supra), the Cuttack Bench of the Tribunal has reiterated the same view. In that case, the power is purchased from the power generating companies and sold to the DISCOMs and others utilizing the transmission, network of OPTCL, PGCIL and other. The above Companies, the generators, DISCOMs and GRIDCO are regulated by Orissa Electricity Regulatory Commission(OERC) whose functions, inter alia, are to issue licenses, determine the conditions therein, regulate the purchase, distribution and supply of electricity and the tariffs payable. The assessee company after purchasing power from the generators sells it to the Distribution Companies. The assessee company had entered I.T.A. No.208/Lkw/2017 13 Assessment Year:2010-11 into a Bulk Supply Agreement with the Distribution companies in the year 1999 and on the terms of these agreements, it used to sell electricity to the Distribution companies. The supply is affected through the transmission lines of OPTCL. The Tribunal was of the view that the assessee merely obtains a service from OPTCL which has got the infrastructure in the form of equipments and transmission lines. In such circumstances it cannot be said that the assessee is using the equipments involved itself in transmitting the powers. The OPTCL was created as an independent company to carry out the work of transmission and wheeling of power. The payment is for service of transmission of power and not for use of plant and/or equipments. Transmission of power is the main business of the OPTCL and for use of its infrastructure including equipment and transmission lines owned by it, transmission charges are paid. All the cost of maintenance of transmission lines, equipment, employees cost and other cost risk is on account of OPTCL.
17. Similarly, in the case of Maharashtra State Electricity Distribution Co. Ltd. Vs. ACIT (supra), the Tribunal has held, following the order of the Jaipur Bench of the Tribunal in the case of Jaipur Vidyut Vitran Nigam Ltd. vs. DCIT (supra), that the payments have been made by the assessee according to the orders of State Electricity Commission and it has been shown that it is only reimbursement of cost and payments are made to State transmission entity for onward distribution to transmission companies.
17. We have also carefully perused the order of the Authority for Advance Rulings and we find that the A.A.R. has not taken into account certain important aspects that the assessee- company is making payment of transmission charges to the transmission company in consideration of availing the benefits of the standard technical facility i.e. transmission System Network of transmission company for the purpose of Transmission of Electricity from the Generation Point to the Distribution Point and as such by merely making available the benefits of its sophisticated Transmission System Network to the applicant company, the transmission company is not rendering any "Technical Services" within the meaning of Explanation 2 to section 9(1)(vii) of the Act. The important factor which was not appreciated by the A.A.R. is that the I.T.A. No.208/Lkw/2017 14 Assessment Year:2010-11 technical staff of Transmission Company by operating and maintaining its grid station and transmission lines, are simply discharging their own statutory functions and all are on the payrolls of the transmission company. Therefore, they do not render any technical service to the assessee-company. We have carefully examined the order of the A.A.R. and orders of the Tribunal on the issue and we find that the Tribunal has taken a consistent view that the payment of transmission charges is not payment for fee for technical services, therefore, the provisions of section 194J of the Act are not attracted. The Tribunal has also taken a view in all those cases that it is not a payment, it is only a reimbursement of the cost incurred on transmission charges. Therefore, provisions of section 40(a)(ia) of the Act is not applicable.
18. Following the view taken by the Tribunal in different cases, we are also of the view that TDS is not required to be deducted on payment of transmission charges. Since the ld. CIT(A) has adjudicated the issue following various orders of the Tribunal, we find no infirmity therein. Accordingly, we confirm his order."
3.2 We further find that Hon'ble Allahabad High Court has also dismissed the appeal filed by the Revenue against the above order of the Tribunal. The findings of Hon'ble court are placed in para 22 and 23. For the sake of completeness, the findings are reproduced below:
"22. We have gone through the aforesaid opinion and find that neither expression "Technical Services" as construed by Supreme Court in Commissioner of Income Tax Vs. Bharti Cellular Limited (supra) and CIT-IV, Mumbai Vs. Kotak Security Limited (supra) has been considered nor the said authority has looked into the fact that mere involvement of technology will not bring something within the ambit of "Technical Services" as defined in Explanation (2) of Section 9(l)(vii) for the reason that here, under Act, 1961, term "Technical Services" has been defined in a different manner i.e. along with terms "Managerial and Consultancy Services". "Managerial or consultancy Services" by itself may not include any technology still would be covered by definition of "fee for technical services" in the Act. Therefore, term "Technical Services" is not dependent solely on the fact that use of technology is involve or not. Moreover, term I.T.A. No.208/Lkw/2017 15 Assessment Year:2010-11 "technical" has to be read applying principle of noscitur a sociis in the term "Managerial and Consultancy". That takes away normal and common meaning of "Technical Services" as is known in common parlance and make it totally different. Detailed aspect in this regard we have already discussed and therefore, we are not able to be persuaded to agree with opinion rendered by Authority for Advance Ruling (Income Tax) vide opinion dated 27.08.2012.
23. Be that as it may, we have no hesitation in holding that in transmission of electricity, there is no human touch or effort and if the term 'technical' is read applying the principle of noscitur a sociis with the term "Managerial or Consultancy", there can be no manner of doubt that view taken by Tribunal cannot be faulted. Consequently, questions formulated above are answered against Revenue and in favour of Assessee."
4. Respectfully following the above judicial precedents in the case of the assessee itself, the appeal of the Revenue is dismissed.
(Order pronounced in the open court on 19/03/2018) Sd/. Sd/.
(PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR )
Judicial Member Accountant Member
Dated:19/03/2018
*Singh
Copy of the order forwarded to :
1. The Appellant
2. The Respondent.
3. Concerned CIT
4. The CIT(A)
5. D.R., I.T.A.T., Lucknow