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2018 (5) TMI 1150 - AT - Income TaxTDS u/s 194I or 195 - whether payments pertaining to the first issue of last mile charges are liable for TDS deduction as fee for professional / technical services rather than rent u/s 194I? - Held that:- There is no denial of the basic fact that the assessee has made the impugned last mile payment in lieu of availing a standard facility of hiring of one pair of optical dark fibre to provide last mile end connectivity. It uses its own internet bandwidth in this entire exercise of involving only hiring of about optical as dark fibre. The Revenue fails to indicate that the said hiring creates any kind of right being vested in assessee’s favour regarding control of the equipment hardware. A coordinate bench in M/s Standard Chartered Bank vs. CIT [2011 (5) TMI 580 - ITAT, Mumbai] holds in similar circumstances that a payment made for availing equipment facilities of standard nature without any control on the corresponding hardware does not amount to royalty u/s 9(1)(vi) Explanation-2 clause (iva) of the Act. Revenue seeking to apply the relevant amended provision in Section 9(1)(vi) of the Act inserted by the Finance Act, 2012 with retrospective effect in impugned assessment year 2010-11 - Held that:- We find this issue to be no more res integra since hon’ble Bombay high in CIT vs. NGC Networks India Pvt. Ltd. [ 2018 (5) TMI 1148 - BOMBAY HIGH COURT] has already concluded the above amendment is not applicable with retrospective effect as per “rule of impossible compliance” since the liability to deduct TDS cannot be fastened on a deductor assessee after the end of relevant previous year. As asked the Revenue to specifically indicate any material suggesting the assessee to have any control over these three equipments of optical dark fibre, bandwidth for production and interconnective uses charges so as to involve royalty component in the impugned payments. There is no such materials. The CIT(A)’s has rightly concluded the assessee’s three payments to be in lieu of standard facilities only not to be taken as royalty - Decided against revenue
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