Case nº A.A.R. No. 1012 of 2010 of Authority for Advance Rulings, August 27, 2012 (case In Re: Ajmer Vidyut Vitran Nigam Limited, City Power House, Hathi Bhata, Jaipur Road, Ajmer-305001 Vs)

President:Mr. P.K. Balasubramanyan (Chairman)
Defense:Income Tax Act, 1961 - Sections 194C, 194J, 201(I), 201(IA), 245N(b)(iii), 245R(2), 9(1)(vii)
Resolution Date:August 27, 2012
 
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Judgment:

P. K. Balasubramanyan (Chairman), J.

  1. This application is by a Public Sector Company seeking an advance ruling on the question whether the wheeling and State Load Dispatch Centre (SLDC) Charges payable by the applicant, a govt. company engaged in the business of transmission of electricity, would be fees for technical services as defined in the Income-tax Act on which the applicant is obliged to withhold taxes under sections 194J or 194C of the Act. The applicant has invoked section 245N(b)(iii) of the Act to maintain its application. The applicant submits that it is making payment of transmission, Wheeling and SLDC Charges to Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN) and others under transmission service agreement or agreements. The services include maintenance of transmission lines which does not involve any technical qualified staff and application of mind, according to the applicant.

  2. This Authority allowed the application under section 245R(2) of the Act to give a ruling on the following question:

    Whether TDS provisions u/s 194J or 194C of the IT Act, 1961 are applicable on Transmission, Wheeling & SLDC Charges paid by the appellant company to M/S RRVPNL & others vide demand of interest u/s 201(I) and 201(IA) of the Act, by the Ld. AO and upheld by the Ld. Commissioner (Appeals) vide the above mentioned order is justified?

    Considering the jurisdiction of this Authority under the Act, its place in the scheme of things and taking note of the pendency of regular proceedings under the Act against the applicant, I reframe the question for ruling as follows:

    Whether TDS provisions under sections 194J or 194C of the Income-tax Act, 1961 are applicable on the Transmission, Wheeling & SLDC Charges paid by the applicant company to M/s RVPN & others?

  3. It is submitted by the applicant that the applicant is engaged in the business of Distribution & Supply of Electricity to customers in various Districts of the State of Rajasthan. The activity of distribution is preceded by the production of electricity and its transmission from the point of production to the point of distribution. The production is by the Generating Company, another entity and transmission to the applicant is through the Transmission System Network of the Transmission Company, RRVPNL. RVPN carries the electrical energy to the applicant at the Distribution System Network of the applicant. The applicant then distributes the energy to end customers.

  4. The transmission of electricity...

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