By Jagdish D. Shah, Jagdish T. Punjabi, Chartered Accountants
fiogf49gjkf0d
New Page 2
Part B — Unreported Decisions
(Full texts of the following Tribunal decisions are available
at the Society’s office on written request. For members desiring that the
Society mails a copy to them, Rs.30 per decision will be charged for
photocopying and postage.)
31 Pacific Internet (India) Pvt. Ltd. v.
ITO — TDS
ITAT ‘D’ Bench, Mumbai
Before R. S. Padvekar (JM) and
Rajendra Singh (AM)
ITA Nos. 1607 to 1609/Mum./2006
A.Y. : 2003-04 to 2005-06
Counsel for assessee/revenue : Anil Sathe/
Sanjay Agrawal
S. 194J Income-tax Act, 1961 — TDS on Fees for Professional
or Technical services — Whether payments for bandwidth and network services
could be said to be ‘Technical services’ liable to TDS — Held, No.
Per R. S. Padvekar :
Facts :
The assessee was engaged in the business of providing
internet services to its clients. For the same it acquired bandwidth and network
operating infrastructure services from MTNL/VSNL. According to the AO, such
services availed were in the nature of technical services covered u/s.194J and
treated the assessee in default u/s.201(1). The CIT(A) on appeal, confirmed the
AO’s order. Before the Tribunal the Revenue submitted that the decision of the
Madras High Court in the case of Skycell Communications Ltd. was not applicable
to the facts of the assessee’s case, as bandwidth and network operating
infrastructure services were nothing but technical services and accordingly,
relied on the orders of the lower authorities.
Held :
The Tribunal did not agree with the contention of the Revenue
and held that since the services availed were standard facility, the case of the
assessee was not only covered by the decision in the case of Skycell
Communications Ltd., but also by the Delhi High Court decision in the case of
Estel Communication Pvt. Ltd. Accordingly, it was held that the payments made to
MTNL/VSNL for availing the services of bandwidth and network operating
infrastructure cannot be said to be technical services within the meaning of S.
195J read with Explanation 2 to S. 9(1)(vii) of the Act.
Cases referred to :
(1) Skycell Communications Ltd., 251 ITR 59 (Mad.)
(2) CIT v. Estel Communication Pvt. Ltd., 217 CTR
(Del.) 102
