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2016 (6) TMI 42 - AT - Income TaxExpenses on account of inter-connectivity charges and usage of leased line - whether payment to M/s. Verizon Hong Kong Ltd., a resident of Hong Kong to be classified either as royalty or income attributed to a Permanent Establishment in India? - TDS liability - Held that:- DRP has not insisted upon any evidence to support the findings returned by the AO to reach at the conclusion that the assessee was provided with any technical services by the payee rather the assessee has made reimbursement of the amount in question to the group company as leased line inter-connectivity charges. Furthermore, since there was no contract or the agreement between the assessee and M/s. Verizon Hongkong Ltd., a resident of Hongkong, and the leased line interconnectivity charges were reimbursed to Meridian IQ Asia Limited, Hongkong, which was invoiced by M/s. Verizon Hongkong Ltd., the same is not chargeable to tax in India and as such, no tax is required to be deducted at source. Following the order passed by the coordinate Bench of the Tribunal in the judgment cited as Wipro Ltd. (2003 (4) TMI 223 - ITAT BANGALORE-C), we are of the considered view that the services offered and availed by the assessee company cannot be termed as technical services by any stretch of imagination and the amount in question paid by the assessee is not taxable, hence, the assessee has no liability to deduct the tax at source under section 195 of the Act. - Decided in favour of assessee.
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