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2026 Supreme(Online)(ITAT) 10715
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI
Sandeep Gosain, J, Jagadish, Accountant Member
SCHREIBER DYNAMIX DAIRIES PVT LTD MUMBAI – Appellant
Versus
DY CIT -OSD-TDS-CIRCLE 2(2) MUMBAI – Respondent
ITA No. 9425/Mum/2025 | ITA No. 9426/Mum/2025 | ITA No. 9427/Mum/2025 | ITA No. 9428/Mum/2025 | ITA No. 9429/Mum/2025 | ITA No. 9430/Mum/2025 | ITA No. 9431/Mum/2025
For the Appellants/Petitioners: Arati Vissanji
For the Respondents: Swapnil Choudhari
TDS applicability depends on the dominant purpose of the transaction; technical services with human intervention attract Section 194J, while installation, commissioning, and cold storage services (without possession of space) are contractual works attracting Section 194C.
Headnote:(A) TDS - Technical Services - Service Level Agreement - Payments for services involving remote diagnostics, troubleshooting, and structured training of personnel constitute "fees for technical services" requiring human intervention, attracting deduction under Section 194J. (Para 11, 12)
(B) TDS - Contractual Work - Installation and Commissioning - Payments for preventive maintenance, installation, and commissioning of machinery are for the execution of work and fall under the exclusion of "assembly or like projects," attracting deduction under Section 194C. (Para 13, 14)
(C) TDS - Rent vs. Storage Services - Cold Storage - Payments for temperature-controlled storage of perishable goods without the grant of possession or control over specific space are for storage services and not rent, attracting deduction under Section 194C. (Para 15, 16)
Issues: Whether payments to Tetra Pak and for cold storage facilities are subject to TDS under Section 194J/194I or Section 194C.
| Table of Content |
|---|
| 1. background of tds disputes regarding technical services and rent for multiple assessment years. (Para 1 , 2 , 4 , 5 , 6) |
| 2. arguments on whether payments were for contractual work, technical services, or rent. (Para 7 , 8 , 9) |
| 3. service level agreements involving human intervention are technical services under section 194j. (Para 10 , 11 , 12) |
| 4. installation and commissioning are contractual works under section 194c. (Para 13 , 14) |
| 5. cold storage payments without possession of space are services under section 194c, not rent. (Para 15 , 16) |
| 6. final determination of applicable tds sections and partial allowance of appeals. (Para 17 , 18 , 19 , 20) |
ORDER
Per: SHRI JAGADISH, A.M.:
1. These appeals filed by the assessee are directed against the orders passed under section 201(1) and 201(1A) of the Income-tax Act, 1961 for the assessment years 2013-14 to 2019-20. Since identical issues are involved in all these appeals, they were heard together and are being disposed of by this common order. For the sake of convenience, the facts in A.Y. 2013-14 are taken as the lead case.
2. The assessee in this appeal has raised following grounds:-
1. The Ld. CIT(A) erred in confirming the action of Ld. AO that:
(a) The payments to Tetra Pack were subject to deduction of tax at source u/s. 194J and not u/s. 194C.
(b) The payments to various parties for using their cold storage facilities were subject to deduction of tax at source u/s 194I and not u/s 194C.
1.1 Therefore, the Ld. CIT(A) ought to have held in respect of above payments that the appellant has not failed to deduct any part of tax in accordance with the provisions of chapter XVII-B of the Act.
1.2 Consequently, it is humbly prayed that the appellant should not be held as an assessee in default within the meaning of section 201 of the Act and the demand raised of Rs. 25,34,834/- and Rs. 21,87,949/-u/s 201(1) and 201(1a) be deleted in its entirety.
2. It is humbly prayed that the reliefs as prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted.
3. The appellant craves leave to add, alter, amend and/or rescind any grounds of appeal before / during the course of the hearing.
4. The assessee is engaged in the business of manufacturing dairy products such as cheese, butter and beverages, which require specialized processing and temperature-controlled storage facilities. A survey under section 133B of the Act was conducted, pursuant to which it was noticed by the Assessing Officer that the assessee had deducted tax at source under section 194C on certain payments where as the tax was liable to be deducted under section 194J and section 194I respectively.
5. The Assessing Officer observed that the assessee had made payments of ₹60,69,736/- to M/s. Tetra Pak India Pvt. Ltd. towards services relating to plant management, maintenance, installation and long-term solutions, on which tax was deducted at 2% under section 194C. The Assessing Officer, after examining the agreements, held that such services involved technical expertise, human intervention, training and software-based support and therefore constituted “fees for technical services” within the meaning of section 9(1)(vii), attracting deduction of tax under section 194J. The Assessing Officer further noted that the assessee had made payments of ₹2,33,77,273/- towards cold storage facilities and held the same to be in the nature of rent for use of space, liable for deduction of tax under section 194I. Accordingly, the assessee was treated as an assessee in default under section 201(1) and interest was charged under section 201(1A).
6. In appeal, the Ld. CIT(A) upheld the action of the Assessing Officer. The Ld. CIT(A), after detailed examination of the agreements, recorded that the services rendered by Tetra Pak included technical supervision, remote diagno
