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2016 (5) TMI 366 - AT - Income TaxTDS u/s 194J - non deduction of tds on bandwidth charges - Held that:- On the facts of the present case, it is our considered opinion that mere provision of bandwidth does not require human intervention. The payments made to service providers were for the use of bandwidth and the payments cannot be considered to be in the nature of managerial, consultancy or technical services so as to attract the provisions of section 194J of the Act. In view thereof, in the absence of any human intervention between the assessee and the services provided by the AIGP, it cannot be said that the payment made by the assessee was for technical services. Merely because for maintenance purpose certain human intervention might be required, it cannot lead to the surmise that the bandwidth charges paid to various AIGP were in the nature of technical services governed by the provisions of section 194J of the Act. The bandwidth charges were paid for utilizing the standard facilities which were provided by way of use of technical gadgets and the same does not involve technical services as there was only interconnection of the networks to the equipments of other service providers. Hence in the absence of any human intervention for providing bandwidth, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act. Accordingly, we reverse the finding of CIT (A) in this regard and hold that bandwidth charges were not liable for tax deduction at source under the provisions of section 194J of the Act. - Decided in favour of assessee.
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