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2016 (6) TMI 891 - AT - Income TaxTDS u/s 194J OR 194C - Fees for technical services - TDS on enrollment expenses and AMC charges - TDs on payment for interconnect/port access charges - Held that:- “Fees for technical services” in section 194J of the Incometax Act, 1961, has the same meaning as given to the expression in Explanation 2 to section 9(1)(vii) of the Act. , that in the Explanation the expression “fees for technical services” means any consideration for rendering of any “managerial, technical or consultancy services”, that the word “technical” is preceded by the word “managerial” and succeeded by the word “consultancy”, that the expression “technical services” is in doubt and is unclear, that the rule of noscitur a sociis is clearly applicable, that it would mean that the word “technical” would take colour from the words “managerial” and “consultancy”, between which it is sandwiched, that Both the words “managerial” and “consultancy” involve a human element, that both, managerial service and consultancy service, are provided by humans, that applying the rule of noscitur a sociis, the word “technical” in Explanation 2 to section 9(1)(vii) would also have to be construed as involving a human element. In that matter the AO was of the opinion that interconnect/port access charges were liable for tax deduction at source in view of the provisions of section 194J of the Act and that these charges were in the nature of fee for technical services. Provisions of section 194J of the Act would be applicable only if any managerial, technical or consultancy services are provided to an assessee and that mere use of technology would not make any service managerial/technical or consultancy service. In the case under consideration use of technology is there, but, it does not mean that it was not a contract. The assessee had rightly deducted TDS as per the provisions of section 194C of the Act. We do not find any legal or factual infirmity in the order of the FAA. So, confirming her order, we decide effective ground of appeal against the AO.
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