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M/s Vodafone Cellular Ltd. Versus The Deputy Commissioner of Income Tax, Tds Circle, Coimbatore

Non-deduction of tax at source under section 194J on roaming charges paid to other telecom operators - 'assessee in default' - appellant liable to pay tax U/s. 201(1) and interest U/s.201(1A) - Held that:- In case of the assessee the roaming charges paid by the assessee will not fall under the category of 'fees for technical services' and therefore, the provisions of section 194J of the Act would not be attracted in the case of the assessee. Further, since Sections 201(1) & 201(1A) of the Act ar .....

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Mohan Alankamony, Judicial Member These two appeals are filed by the assessee, aggrieved by the orders of the learned Commissioner of Income-tax(A)-II, Coimbatore for the assessment years 2009-10 & 2010-11 in ITA No.85/2013-14 & in ITA No.86/2013-14 both order dated 28.08.2014, passed under sections 201(1) and 201(1A) r.w.s 250 of the Act. 2. The assessee has raised several grounds in both the appeals; however the Ld. A.R. has confined his arguments only with respect to one identical gr .....

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U/s.201(1A) of the Act." 3. The assessee is engaged in the business of providing cellular mobile services. During the course of its business the assessee had paid roaming charges to other telecom operators against which the assessee had not deducted tax at source in accordance with the provisions of Section-194J of the Act. After an elaborate discussion, the Ld. Assessing Officer came to a conclusion that the machinery and equipments deployed by the service provider company cannot work on .....

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issue is covered by the recent decision of the Chennai Bench of the Tribunal in the case of M/s. Dishnet Wireless Ltd., in ITA Nos.320 to 329/Mds/14 vide order dated 20.07.2015 where it was held that the tax need not be deducted at source in respect of payment towards roaming charges to other service providers, since it would not amount to payment of fees for technical services as provides U/s.194J of the Act. Ld. D.R vehemently argued by referring to the order of the Ld. Assessing Officer from .....

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h the provisions of section 194J of the Act would be attracted and the assessee will be liable to deduct tax at source. 5. After hearing the both sides, we find the issue in both the appeals to be identical and squarely covered by the decision of the Chennai Bench of the Tribunal cited by the Ld. A.R. supra. The relevant portion of the order is extracted herein below for reference:- "25. Now coming to roaming charges, the contention of the assessee is that human intervention is not required .....

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ub-Divisional Engineer clarified that human intervention is required for establishing the physical connectivity between two operators for doing necessary system configurations. After necessary configuration for providing roaming services, human intervention is not required. Once human intervention is not required, as found by the Apex Court, the service provided by the other service provider cannot be considered to be a technical service. It is common knowledge that when one of the subscribers i .....

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