TMI Blog2007 (11) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... f technically qualified persons to render the services but that itself do not bring the amount paid as fees for technical services within the meaning of Explanation 2 to section 9(1)( vii ). The amounts paid are towards annual maintenance contract of certain machinery or for converting POY into textured/twisted yarn. The technology or the technical knowledge of the persons is not made available to the assessee but only by using such technical knowledge services are rendered to the assessee. In such a case, it cannot be said that the amount is paid as fees for technical services . Rendering services by using technical knowledge or skill is different than charging fees for technical services. In a latter case, the technical services are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer held that for all these payments made the assessee should have deducted tax at source under section 194J and not under section 194C. Thus, for the differential amount the assessee was treated as assessee in default under section 201(1) of the Act. Interest under section 201(1A) was also levied. Learned CIT(A), after considering the judgment of Hon ble Madras High Court in the case of Skycell Communications Ltd. v. Dy. CIT [2001] 251 ITR 53 1 and Circular No. 751 dated 8-8-1995 [215 ITR (St.) 12] held that the amount paid is not towards professional services or fees for technical services. The revenue is in further appeal before us wherein following ground has been raised: "On the facts and in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of Skycell Communications Ltd. ( supra ) observed thus: "In the modern day world almost every facet of one s life is linked to science and technology inasmuch as numerous things used or relied upon in every day life is the result of scientific and technological development. Every instrument or gadget that is used to make life easier is the result of scientific invention or development and involve the use of technology. On that score, every provider of every instrument or facility used by a person cannot be regarded as providing technical service." "When a person hires a taxi to move from one place to another, he uses a product of science and technology, viz., an automobile. It cannot on that ground be said that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice in order to have the facility of being able to communicate with others he does not contract to receive a technical service. What he does agree to is to pay for the use of the airtime for which he pays a charge. The fact that the telephone service provider has installed sophistical technical equipment in the exchange to ensure connectivity to its subscriber, does not on that score, make it provision of technical service to the subscriber. The subscriber is not concerned with the complexity of the equipment installed in the exchange or the location of the base station. All that he wants is the facility of using the telephone when he wishes to, and being able to get connected to the person at the number to which he desires to be connecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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