Income Tax Appellate Tribunal Delhi M/S. The Joint Secretary, Organising ... vs Dcit (Tds), Dehradun on 10 December, 2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA No.2941/Del/2015 Assessment Year: 201112 M/s Joint Secretary, vs Dy. Commissioner of Income The Organising Committee for tax, (TDS), Dehradun. Winter Games, 2009, Ice Rink Compound, Maharan Pratap Sports College, Raipur, Dehradun. PAN: AAAAO1473G ( Appellant) (Respondent) Assessee by Shri Saurabh Goyal, CA Shri Deepesh Garg, Advocate Revenue by Shri Surender Pal, Sr. DR Date of Hearing 28.11.2018 Date of Pronouncement 10.12.2018 ORDER PER K. NARASIMHA CHARY, JM Challenging the order dated 25.2.2015 inAppeal No.166/201314, passed by the Learned Commissioner of Income Tax (Appeals)Dehradun (Ld. CIT(A)), assessee preferred this appeal. 2 2. Brief facts of the case are that the assessee is a society registered under the Societies Registration Act, 1860 by the Registrar of Societies, Uttarakhand for the purpose of organizing the winter games. The Government of Uttarakhand has formed a body namely "Organizing Committee for Winger Games, 2009) under the chairmanship of Hon'ble Chief Minister of Uttarakhand. The Organizing Committee for Winter Games is an autonomous society of the Department of Sports, Government of Uttarakhand. The affairs of the assessee are controlled by the State Government. 3. A survey/verification proceeding was carried out u/s 133A of the I T. Act, 1961("the Act") on 31.01.2011. During the course of assessment proceedings, the assessee was asked to provide details of total payments made to various parties/organizations for various jobs undertaken in connection with organizing the Winter Games and to furnish details of deduction of tax at source and payment into Central Government account of the same. It was observed during the course of assessment proceedings, that payments were also being made to certain foreign companies for EPC contract (Engineering Procurement and Construction) and technical consultancy contract. During the course of assessment proceedings, the Assessing Officer observed that no TDS was deducted by the assessee, against such payment. He, therefore, asked the assessee to show cause as to why it should not be held as an assessee in default u/s 201 and why short deduction should not be charged alongwith interest u/s 201(1 A). In response it was submitted by the assessee, that gross contractual payments had been made to the following companies as under (i) M/s Pomagalski S.A. France Rs. 8,54,550/ (ii) M/s Snow Star SPA Rs.85,88,220/ (iii) M/s Space Age Pvt. Ltd. Rs.75,12,309/ 3 4. It was submitted that SI. No. 1 & 2 were nonresident companies and payments to these nonresident companies were made out of release of LC for purchase of equipment only. TDS was not applicable on the purchase price of equipment. The A.O. observed that the assessee's contentions that the payment was made for purchase of equipment only does not hold ground as the perusal of contract with the company indicated that the contract was for work being defined in the contract title as "EPC/improvement of slope, arrangement of artificial snow making system alongwith provisioning of required water storage (lake) and installation of skilifts for skiresorts at Auli, (Distt. Chamoli) and required water storage and carrying out comprehensive maintenance for three years including one year of warranty period". The A.O. observed that there were 3 companies in consortium i.e. M/s Pomagalski SA, M/s Snow Star SPA and M/s Space Age Power Pvt. Ltd. with M/s Pomagalski as the lead member. He observed that under the contract with M/s Snow Star SPA as mentioned in the appendixA, various equipment was also supplied along with a various services, support services engineering details, project management, supply of software and hardware of snow tern, control panels, project drawings and project management to complete the now making system along with manpower assistance for erection work supervision commissioning, training and maintenance. The contract with M/s Polmagalski is also of similar nature and is in respect of electro mechanical and control equipments and towers installed for executing the s