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2014 (2) TMI 1165 - ITAT CHENNAINon deduction of TDS on carrier payments made to M/s. Clickatel, South Africa - Disallowance u/s 40(a)(i) - CIT(A) deleted disallowance - Held that:- Nature of services rendered by non-resident i.e. M/s. Clickatel is only to transmit bulk SMS. The nature of service provided by Clickatel requires no technical knowledge and what was rendered was just transmission of data which requires no technical skill. The finding of the Commissioner of Income Tax (Appeals) that carrier which is a medium for sending bulk SMS and as such cannot be considered to be rendering any technical services and no TDS is required to be made is correct. The Commissioner of Income Tax (Appeals) held that Clickatel which is a non-resident carrier rendered services outside India and no part of the payment made to Clickatel is chargeable to tax in India. See CIT v. Bharti Cellular Ltd [2010 (8) TMI 332 - Supreme Court of India]. - Decided against revenue. Income accrued not offered to tax - CIT(A) deleted addition - Held that:- Assessee received advance income from its customers and whenever services were provided by the assessee, assessee adjusts the advances received from customers and recognizes the income in the year in which services were rendered. Since the appellant maintains books on accrual system, income shall be recognized only when it accrues. In the given case, the income accrues only when the appellant sends the required no. of SMS. Therefore, the service charges received in advance for the service to be rendered in future years are not liable to tax in the year of receipt. Only on completion of the service, the appellant has right over the amount that was received in advance. - Decided against revenue.
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