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2016 (2) TMI 235 - ITAT CHENNAITDS u/s 195 - carrier payments made to M/s. Clikatel, South Africa without deduction of tax at source - Held that:- The 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. The Commissioner of Income Tax (Appeals) held that Clickatel which is a nonresident carrier rendered services outside India and no part of the payment made to Clickatel is chargeable to tax in India. The Commissioner of Income Tax (Appeals) also followed the decision of Hon’ble Supreme Court in the case of CIT Vs.Bharti Cellular Ltd. (2010 (8) TMI 332 - Supreme Court of India) on the issue. The Hon’ble Delhi High Court the case of CIT Vs. Bharti Cellular Ltd. (2008 (10) TMI 321 - DELHI HIGH COURT ) held that these services do not involve human intervention and these services cannot be regarded as fee for technical services. No good reason to interfere with the decision of the Commissioner of Income Tax (Appeals) in holding that payment made by the assessee to Clickatel is not fees for technical services and no TDS is required to be made - Decided against revenue Addition on income accrued not offered to tax - CIT(A) deleted the addition - Held that:- As decided in assessee's own case 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. .In view of the above, the action of the AO is not justified in making the above disallowance and hence directed to be deleted. - Decided against revenue
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