2018 (4) TMI 931

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....NSE. The assessee earns brokerage and commission from Primary Market Operations, Secondary Market Operations and fee income. During the course of scrutiny assessment, AO made disallowance of Data Circuit / Broadband / Multi-Protocol Label Switching ("MPLS") charges under section 40(a)(ia) of the Act for purported non-deduction of taxes u/s.194J of the Act. 4. By the impugned order, CIT(A) confirmed the disallowance. 5. At the outset, learned AR placed on record the order of the Tribunal in assessee's own case for the A.Y.2010-11 in ITA No.3137/Mum/2014 and 3502/Mum/2014 wherein exactly similar issue was decided by the Tribunal in assessee's favour. We had carefully gone through the order of the Tribunal, para 5, Page 2 to 4 reads as under....

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....t of net works to equipment of other service providers to provide subscribers efficient and flawless services,that the DATA link usage was only for transmission of data from the server of assessee to the designated client server, that it was obvious that through the process of interconnection one service provider would establishes a link between it's own network, services and equipment with the network, services and equipment of other service provider, that for facilitating these arrangements, service provider only uses the network element (for carrying the lines to their destination)of other service provider, that by providing the interconnection, the interconnection provider does not render any technical services either to the Interconnec....

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....he other service provider. In order to provide efficient and flawless services to the subscribers, the existing service providers provide interconnection of their networks through equipment of their networks to the equipments of other service providers. The connection is used for the transmission of DATA from one service provider to the designated client server and there was no human intervention for the transmission of the DATA. 16. On the perusal of the record, it transpires that facilities were provided by two entities i.e. the assessee and the service providers, who were linked to each other through the DATA link and for facilitating the arrangement, one service provider used the network element of other service provider to provide s....

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.... DATA link charges were paid for utilizing the standard facilities which were provided by the individual service providers by way of use of technical gadgets which were made available vide DATA link satellite link line established from one service provider to be carried over to the other service provider, does not involve technical services as there was only interconnection of the networks to the equipments of other service providers. In the absence of any human intervention for transmitting the DATA through such DATA link satellite link line, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act. Accordingly, we reverse the finding of CIT(A) in this regard and hold tha....

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....- * CIT v. Raychem RPG Ltd. (346 ITR UNHM-HM ) * CIT v. Geoffrey Manners & Co. Lid. (226 Taxman135) (Bom.) * CIT v. UHDE India (P.) Ltd. (224 Taxman 137(Bom.) * Amway India Enterprises v. Dy. CIT ( 111 ITD 112(Del Trib) (SB) affirmed in n CIT v. Amway India Enterprises (346 ITR 341(Del HC ') * CIT v. Voith Paper Fabrics India Ltd. (.346 ITR 70)(P&H) * CIT v. Asahi India Safety Glass Ltd. (203 Taxman 277) (Delhi HC) * CIT v. Varinder Agro Chemicals Lid. (309 ITR 272) (P & H) 11. In the following judicial pronouncements, it has been held that updation / modification for improving the operational efficiency are revenue in nature. * CIT v. Raychem RPG Ltd. (346 ITR 138) (Bom.) * Amway India Enterprises v. Dy. CIT ....

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....td. (304 ITR 84(Mad)(HC) * Commissioner of Income-tax vs. MAC Charles (India) Lid. (60 taxmann.com 68) (Kar) * M/s. Sprang & Associates v. DCIT (ITA No. 31/Mum/2016) * Am way India Enterprises v. DCIT 27 SOT 344 (Del Trib) 16. Even decision with regard to treating the expenditure incurred in a lease property to be treated as revenue expenditure is also supported by the following judicial pronouncements. * Commissioner of Income-tax vs. Hi Line Pens (P.) Ltd. (306 ITR 182) (Delhi HC) * CIT v. Anush Shares and Securities (P) Ltd., 62 mxrnann.com 287) [Mad.) * Deputy Commissioner of Income-tax vs. Lazard India (P.) Ltd. (41 SOT 72) (Mum.) * Deputy Commissioner of Income-tax vs. Ikea Trading (India) (P.) Ltd. (82 (Del Trib....