TaxTMI 
TaxTMI 
2016 (2) TMI 1164
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.... 02. 2013, determining the income of the assessee at Rs. 127. 91 Crores. ITA/3502/Mum/2014: 2. Effective ground of appeal filed by the assessee is about disallowance of Data/Circuit Bandwidth Charges(D/CBC)amounting to Rs. 2. 16 Crores u/s. 40(a)(ia)of the Act. During the assessment proceedings the AO found that the assessee had debited Rs. 2. 30 Crores towards D/CBC towards payment made to eight parties. On verification of TDS statement, he found that the assessee had not deducted tax at sources, as required by the provisions of the Act, while making the payment. Referring to the provisions of Section 194 J of the Act, the AO held that payment made for towards fees for professional or technical services had to be made only after deductio....
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....ee was liable to deduct tax while crediting the said payment, that there was human intervention at all levels by the service providers, that the soul and the substance of the agreement revealed that at micro level all activities included the human intervention, that the services availed by the assessee were of technical nature. Following his order for the AY. 2007-08, the FAA dismissed the appeal filed by the assessee. 4. Before us, the Authorised Representative(AR)stated that services provided by the eight entities were not of technical nature, that human intervention was absent in the services provided to the assessee, that he relied upon the cases of Siemens Limited(ITA/4356/Mum/2010), iGate Computer System Ltd. (67SOT296), Torry Harris....
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....nical services but for allowing the satellite link line from one service provider to be carried over to the other service provider, that the existing service provider had to provide inter connection of their net works from equipment 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 on....
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....ilities provided by the service providers by using technical gadgets, which were made available universally to the others by way of the DATA link satellite line, which was established from one service provider to be carried over to the 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....
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.... certain human intervention was provided, cannot lead to the surmise that the DATA link charges paid to various telecom service providers, were in the nature of technical services governed by the provisions of section 194J of the Act. The 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 throug....
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....made a disallowance of Rs. 1, 08, 45, 878/- 7. Before the FAA, the assessee made elaborate arguments and produced additional evidences. He called for remand report from the AO. After considering the Report and rejoinder to the report of the AO, the FAA held that lease expenses were nothing but expenses that accrued to the assessee and were computed as per the provisions of Accounting Standard-19(AS-19), that the assessee had to follow the AS compulsorily, that AS-19 had been prescribed by the ICAI to claim lease expenses, that the expenses were claimed in accordance with accounting standard, that AO was not justified in treating the expenses as contingent/unconfirmed, that the claim made by the assessee was based on scientific method, that....