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2024 (8) TMI 1477 - AT - Income TaxTDS u/s 195 - disallowance of software maintenance charges - non deduction of TDS - disallowance u/s.40(a)(i) - HELD THAT - Co-ordinate Bench of the Tribunal in the case of assessee itself for the assessment year 2012-13 2020 (1) TMI 1641 - ITAT PUNE decided appeal in favour of the assessee held that held payment for use of software made by the assessee to CMA CGM France does not satisfy the requirement of use of or the right to use any copyright of software . Once it is held that para 3 of Article 12 is not attracted as a sequitur the application of clause (a) of para 4 of Article 12 of the DTAA with Portuguese would automatically be ousted thereby making the amount paid by the assessee to CMA CGM France for use of LARA DIVA and Ocean software as immune from taxation in India. Going by the beneficial provision in the DTAA vis- -vis the Act it is held that there was no requirement on the part of the assessee to deduct tax at source which should have called for any disallowance u/s. 40(a)(i) of the Act - Decided against revenue. Disallowance of leased line/data link charges - This issue is no more res integra as the same is settled in favour of the assessee by the Hon ble Supreme Court in the case of CIT Vs. Kotak Securities Ltd. 2016 (3) TMI 1026 - SUPREME COURT wherein it was held that the charges paid towards leased line are not in the nature of Technical services within the meaning of section 9(1)(vii) of the Act.The service provided by the Stock Exchange for which transaction charges are paid fails to satisfy the aforesaid test of specialized exclusive and individual requirement of the user or consumer who may approach the service provider for such assistance/service. It is only service of the above kind that according to us should come within the ambit of the expression technical services appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature service though rendered would be mere in the nature of a facility offered or available which would not be covered by the aforesaid provision of the Act - Decided in favour of assessee.
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