COMMISSIONER OF INCOME-TAX Vs. KALYANI STEELS, LTD

JUDGEMENT

(1.) These appeals are filed by the revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for short) challenging the order of the Income Tax Appellate Tribunal, Bangalore Bench 'A' ('the Tribunal' for short) in ITA Nos.861/Bang/2011 dated 18.12.2012, 1041/Bang/2013 dated 21.02.2014, 862/Bang/2011 dated 18.12.2012, 859/Bang/2011 dated 18.12.2012, 1040/Bang/2013 dated 17.12.2013 and 860/Bang/2011 dated 18.12.2012 respectively.

(2.) Since the substantial questions of law raised in these appeals are identical, the same are heard together and disposed of by this common judgment.

(3.) The assessee is engaged in the business of manufacture of steel. During the assessment year 2008- 09, 2009-10 and 2010-11 the assessee has made payment to M/s Hospet Steel Limited ('HSL' for short) towards managerial and technical services rendered by way of operating and maintaining an integrated steel plant. Survey under Section 133A of the Act was conducted. Subsequent to survey, proceedings under Section 201(1) and Section 201(1A) of the Act were initiated. Orders under Sections 201(1) and 201(1A) of the Act were passed holding that, HSL and M/s Kalyani Steel Limited ('KSL' for short) and M/s Mukund Limited ('ML' for short) are independent entities. HSL is a service company and managed an integrated steel plant for KSL and ML. The required labour and staff for the services has been employed by HSL. HSL has used its assets and machineries for rendering the agreed services. The amounts received towards service charges has been accounted in the P & L account of HSL and the same is offered to tax. Hence, the Assessing Officer held that, assessee is in default under Section 201 for not deducting TDS under Section 194J of the Act and consequently, interest under Section 201(1A) of the Act was computed. Being aggrieved by the same, appeal was preferred by the assessee/respondent before the Appellate Commissioner. The Appellate Commissioner arrived at a conclusion that the payment made by the assessee to HSL is reimbursement of expenses and there was no liability to deduct TDS under Section 194J of the Act and hence, Section 201(1) and 201(1A) of the Act are not justifiable. Being aggrieved by the same, revenue has preferred these appeals raising following substantial questions of law: