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2017 (12) TMI 1833 - AT - Income TaxTDS u/s 195 - assessee has paid co-location charges outside the country - Assessee clarified that co-location charges is nothing but charges paid by the assessee outside the country for storage of electronic data in a manner which can be retrived by the customers outside the country, the assessee has paid storage charges which is known as co-location charges - HELD THAT:- From the material available on record it appears that Cinenet Communications Inc. USA is in the business of providing Data Centre Racks. The assessee has utilised racks space provided in Data Centre Racks owned and maintained by Cinenet Communications Inc USA. In case of technical issue, Cinenet Communications Inc appears to have provided basic support for use of racks. Moreover, payment made to Novatel Ltd. and Tata Communication (US) Inc, the assessee claims before the CIT(Appeals) that the service was utilised outside the country. Therefore, admittedly, the payment was made to the company in USA. In the case of Verizon Communications Singapore Pvt. Ltd.[2013 (11) TMI 1058 - MADRAS HIGH COURT] the payment was made to Singapore company. Therefore, here we have to examine the Double Taxation Avoidance Agreement between India and USA. Both the authorities had no occasion to examine the Double Taxation Avoidance Agreement between India and USA. Moreover, it is also to be examined how the electronic data was transmitted to USA. Whether the data stored in Data Centre Racks of Cinenet Communications Inc was used by any other Indian customers also needs to be examined - whether the recipient company in USA has any permanent establishment in India or whether they have any business connection in India needs to be examined in the light of Double Taxation Avoidance Agreement between India and USA. Since such an exercise was not done by both the authorities below, this Tribunal is of the considered opinion that the matter needs to be re-examined. Thus Assessing Officer shall re-examine the matter in the light of the material that may be filed by the assessee and the Double Taxation Avoidance Agreement between India and USA and decide the issue afresh in accordance with law - Appeal filed by the assessee is allowed for statistical purposes.
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