TaxTMI 
TaxTMI 
2017 (1) TMI 1421
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....e amount paid towards charges for internet connectivity. 3. The Assessing Officer noticed that the assessee incurred internet charges amounting to Rs. 72,93,471/- and deducted TDS on such amount u/s 194C of the Act. The assessee stated that the internet charges paid for the usage of internet connection provided by the service provider are not for any technical, managerial or consultancy services so as to deduct tax u/s 194J of the Act. Since such charges paid are for availing standard facilities available to all and they are not paid for any technical, managerial or consultancy services requiring TDS u/s 194J of the Act, the Assessing Officer rejected the contentions of the assessee and passed order u/s 201(1) treating the assessee as defa....
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....to warrant any deduction of tax from payment made by the assessee to the US company. The Hon'ble Madras High Court in Skycell Communications Ltd. and Another Vs. DCIT and others (2011) 251 ITR has considered the provisions of section 9(1)(vii). Similarly, ITAT Chandigarh Bench in the case of HFCL Infotel Limited Vs. ITO MANU/IG/5036/2005: (2006) 99 TTJ 440, referred to the decision of Madras High Court in the case of Skycell Communications Ltd. Further, ITAT Mumbai bench in Pacific Internet (India) Pvt. Ltd. Vs. ITO MANU/WB/0620/2008 : (2009) 318 ITR 179 (AT) has relied upon the observations rendered in Estel Communications Pvt. Ltd. (Supra) and Skycell Communications Ltd(supra) and held that payment for use of internet is not covered by th....
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....-11 in para 9 to 12 of the order holding that on the payments made by the assessee for purchase of software, tax is not required to be deducted at source u/s 194J of the Act as the payments made were only to purchase software required for assessee's business purposes and the same was capitalized, the payments were not made for any technical services and the payments would not fall under fees for technical service. The Ld. Counsel for the assessee further submits that this software purchased by the assessee is a regular software for accounting purposes, not copywrited software and, therefore, it will not fall within the definition of "Royalty" as defined in Sec. 194J of the Act. He placed reliance on the following decisions in support of his....
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....s require expertise in technology and providing the client such technical expertise. * Managerial services is used in the context of running and management of the business of the client. * Consultancy is 0 be understood as advisory services wherein necessary advise and consultation is given to its clients for the purpose of client's business. In view of the above, the computer software purchased would not fall in the definition of Fees for Technical Services and therefore the provisions of section 194J are not applicable. 12. As per our considered view under Section 194J, TDS is not required to be deducted at source in respect of payment made for purchase of computer software development. In the instant case, assessee has purcha....