Cross border telecommunication charges - Taxability under Indo-US DTAA Article 12(4) fee for included services - Disallowance for non-deduction of TDS

Facts:

Assessee paid telecommunication charges to a US entity for leased line/interconnectivity charges. Revenue disallowed the spend for non-deduction of TDS under Section 40(a)(ia). On appeal CIT(A) upheld stand of assessee allowing the spend citing -

1. No human interface existed in these services.

2. Did not have any scientific process, technical element in them to "make available" any technology to assessee.

3. No income component was embedded in it warranting TDS "on sums chargeable to tax in India".

4. Del HC in Bharti Airtel case had done a detailed reading favouring the assessee.

Aggrieved revenue went in appeal to ITAT -

Held against revenue that no TDS deduction was warranted on cross border telecommunication charges. Order of CIT(A) needed no interference.

Applied:

(i) ITA No. 3328 to 3332/D/2015 Assessment years 2007-08 to 2011-12 : 2018 TaxPub(DT) 2213 (Del-Trib) M/s. Tata Teleservices Ltd. v. ITO

(ii) ITA No. 1417/2018 (Del) : 2022 TaxPub(DT) 6330 (Del-HC) CIT v. Tata Teleservices Ltd.

(iii) (2016) 383 ITR 1 (SC) : 2016 TaxPub(DT) 1609 (SC) CIT v. Kotak Securities Ltd.

(iv) (2016) 290 CTR 436 (Kar) : 2016 TaxPub(DT) 3679 (Karn-HC) CIT v. Vodafone South Ltd.

(v) 194 ITD 253 (Del) Autoliv ASP Inc. v. DCIT

(vi) (2001) 251 ITR 53 (Mad) : 2001 TaxPub(DT) 1189 (Mad-HC) Skycell Communications Ltd. v. DCIT

(vii) (2009) 319 ITR 139 (Del) : 2009 TaxPub(DT) 0996 (Del-HC) CIT v. Bharti Cellular Ltd.

(viii) (2017) 392 ITR 186 (SC) : 2017 TaxPub(DT) 0638 (SC) DIT (International Taxation) v. AP. Moller Maersk A/S

(ix) (2009) 117 TTJ 456 (Del) : 2009 TaxPub(DT) 0296 (Del-Trib) Millennium Infocom Technologies Ltd. v. ACIT

(x) (2020) 118 taxmann.com 2 (Mum) : 2020 TaxPub(DT) 2979 (Mum-Trib) Edenred Pte. Ltd. v. Dy. DIT(IT)

(xi) 182 ITD 526 (Bang.) Edgeverve Systems Ltd. v. Dy. Asstt. CIT (IT)

(xii) 173 DTR 308 (Pune) EPRSS Prepaid Recharge Services India (P.) Ltd. v. ITO

(xiii) Del HC in CIT (TDS) v. Tata Teleservices Ltd. in ITA 1417/2018 vide Order, dated 30-5-2022 : 2022 TaxPub(DT) 6330 (Del-HC)

(xiv) Karnataka HC - CIT, TDS, Bangalore v. Vodafone South Ltd. (2016) 72 taxmann.com 347 (Karnataka) : 2016 TaxPub(DT) 3679 (Karn-HC) holding no TDS applicable on interconnect usage charges (IUC).

Case: DCIT v. Personiv Contact Centres India (P) Ltd. 2023 TaxPub(DT) 1170 (Del-Trib)