2018 (2) TMI 1461

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....reinafter referred to as the 'ITAT') challenges the decision with respect to the sum brought to tax under Section 40(a)(i) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The question of law urged is whether the charges paid by the assessee to the MCI WorldCom Asia P. Limited (a non-resident overseas Singapore based entity) ought to have been subjected to tax deduction? The Assessing Officer ('AO') had, upon consideration of the material placed, held in the assessment order that the sum of Rs. 59,40,081/- for the assessment year ('AY') 2001-02 and Rs. 64,28,065/- for the AY 2002-03 had to be subjected to deduction and brought to tax. The assessment order does not contain any reasons in support of the conclusions. T....

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.... merely following the decision of Delhi High Court in Bharti Cellular Ltd. (supra), which was not approved in toto. Counsel for the respondent-assessee submitted that the issue is no longer res integra and cannot be said to have not been covered by the decision in the case of Bharti Cellular Ltd. (supra). It is submitted that in the case of Bharti Cellular Ltd's case (supra) by the Supreme Court, the final ruling went in favour of the assessee and no appeal was preferred. The decision in Bharti Cellular Ltd's case (supra) pertinently states as under:- "6. The question basically involved in the lead case is: whether TDS was deductible by M/s. Bharti Cellular Limited when it paid interconnect charges/access/port charges to BSNL? For ....

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....ments are arrived at? For example, we are informed that each service provider is allotted a certain "capacity". On what basis such "capacity" is allotted and what happens if a situation arises where a service provider's "allotted capacity" gets exhausted and it wants, on an urgent basis, "additional capacity"? Whether at that stage, any human intervention is involved is required to be examined, which again needs a technical data. We are only highlighting these facts to emphasise that these types of matters cannot be decided without any technical assistance available on record. 8. There is one more aspect that requires to be gone into. It is the contention of Respondent No.1 herein that Interconnect Agreement between, let us say, M/s.....

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....n of a service payable. "Call Charges" shall mean the charges payable by the customer to WorldCom for switched telecommunications/services. "Charges" shall mean the Call Charges and/or Activation Charge and/or Service charges payable by the customer to WorldCom in respect of a service and as the same are set out in the relevant service order and revised from time to time. "Service Charge" shall mean the monthly service charge for a data service payable." The agreement also places certain restrictions upon the re-sale of the services to the third parties which are provided by the MCI Worldcom Asia P. Limited. If these contractual conditions are taken into account, it is quite apparent that the nature of services in issue is not m....