Sections 194, 194D and 194J of ITA, 1961 – TDS – Works contract or professional services – Outsourcing expenses – Services clerical in nature – Not technical or managerial services – Tax deductible u/s 194C and not u/s 194J TDS – Insurance business – Insurance agent’s commission – Service tax – Quantum of amount on which income-tax to be deducted – Tax deductible on net commission excluding service tax

38.  CIT vs. Reliance Co. Ltd.; 414 ITR 551 (Bom.)

Date of order: 10^th June, 2019

A.Y.: 2009-10

Sections 194, 194D and 194J of ITA, 1961 – TDS – Works contract or professional services – Outsourcing expenses – Services clerical in nature – Not technical or managerial services – Tax deductible u/s 194C and not u/s 194J

TDS – Insurance business – Insurance agent’s commission – Service tax – Quantum of amount on which income-tax to be deducted – Tax deductible on net commission excluding service tax

The assessee, an insurance company, deducted tax at source u/s 194C of the Income-tax Act, 1961 on payment of outsourcing expenses. The Department held that the tax ought to have been deducted u/s 194J on the ground that the payments were for managerial and technical services. The assessee deducted the tax at source on the agent’s commission excluding the service tax comp

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