Dy. CIT v. Reliance Communications Ltd.

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The Tax Publishers2020 TaxPub(DT) 4182 (Mum-Trib)

INCOME TAX ACT, 1961

Section 194J

Roaming process between participating entities was fully automatic and did not require any human intervention and, therefore, could not be termed as technical services and, therefore, roaming charges paid by the assessee were not in the nature of 'fees for technical services'. Accordingly, assessee was not liable to deduct tax under section 194J.

Tax deduction at source - Under section 194J - Fees for technical services - Roaming charges paid by telecom operator

Assessee was engaged in providing telecommunication services to its subscribers across the country, roaming charges/inter-connect usage charges to other telecom operators. AO held the same to be in the nature of 'fees for technical services' and thus disallowed deduction for want of TDS under section 194J. Held: Roaming process between participating entities was fully automatic and did not require any human intervention and, therefore, could not be termed as technical services and, therefore, roaming charges paid by the assessee were not in the nature of 'fees for technical services'. Accordingly, assessee was not liable to deduct tax under section 194J.

Relied:CIT v. Vodafore South Ltd. (2016) 72 Taxmann.com 347 (Karn-HC) : 2016 TaxPub(DT) 3679 (Karn-HC), Bharati Airtel v. ITO (TDS)(2016) 67 Taxmann.com 223 (Del-Trib) : 2016 TaxPub(DT) 1376 (Del-Trib), Seimens Limited, (2013) 30 Taxmann.com 200 (Mum-Trib) : 2013 TaxPub(DT) 0843 (Mum-Trib), Vodafone East Ltd. v. Addl. CIT (2015) 61 Taxmann.com 263 (Kol Trib) : 2015 TaxPub(DT) 3654 (Kol-Trib), Idea-Cellular Ltd. v. CIT (2016) 65 Taxmann.com 116 Pune : 2016 TaxPub(DT) 0576 (Pune-Trib), Dishnet Wireless Ltd. (2015) 60 Taxmann.com 329 (Chen-Trib) : 2015 TaxPub(DT) 2968 (Chen-Trib), Bharti Hexacom Ltd. v. ITO ITA 656/JP/2010 decided on 12-6-2015 : 2015 TaxPub(DT) 3831 (Jp-Trib) and CIT v. Bharti Cellular Ltd. (2011) 330 ITR 239 (SC) : 2011 TaxPub(DT) 394 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

IN THE ITAT, MUMBAI BENCH