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DCIT - (TDS) Mumbai Versus M/s Reliance Communications Infrastructure Ltd

Non deduction of TDS on the access charges paid to RCOM - whether payment of access charges to RCOM cannot be said to be payment towards 'fees for technical services' or 'rent' and hence the payment need not be subject to TDS under section 194-J or 194-I? - Held that:- The fact is that none appeared on behalf of the Revenue. However, we have gone through the record and since the AO passed an order under section 154 of the Act rectifying his earlier order passed under section 201(1) of the Act vi .....

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the orders passed by the CIT(A)-14, Mumbai and they pertain to assessment years 2007-08 to 2010-11. Admittedly, common grounds were urged in all these appeals and therefore they can be disposed of by a combined order. 2. We accordingly proceed to narrate the facts of the case in respect of A.Y. 2007-08 for the purpose of disposal of these appeals. Assessee-company is licence holder for providing broad band and internet services. It provides various data internet and premium content value added .....

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h the assessee made payments to RCOM, it has not deducted tax at source on the access charges paid to RCOM. As per the AO the payments are towards technical services falling under the provisions of section 194J of the Act. For failure to deduct tax at source assessee was treated as 'assessee in default' under section 201(1) of the Act to the tune of ₹ 8,26,01,079/- for A.Y. 2007-08. Similar procedure was followed by the AO for the next three assessment years. 4. Aggrieved, assessee .....

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of the Act, assessee contends that the amount paid by way of 'access charges' is not in the nature of 'rent' as understood under section 194-I of the Act. Finally it was contended that even if it were to be held that tax ought to have been deducted at source but the fact remains that assessee has already made payment to RCOM which in turn have already paid the tax, in which event provisions of section 201(1) do not get attracted. 5. Learned CIT(A) accepted both the contentions of .....

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ed access charges as income in its audited books of account and filed returns of income for the years under consideration. In other words, tax was paid by the recipient and hence in the light of the circular of the CBDT dated 29.01.1997 and the decision of the Apex Court in the case of Hindustan Coca Cola Beverage (P) Ltd. vs. CIT 293 ITR 226 the order passed under section 201(1) in respect of access charges was rectified. In the light of the order dated 08.11.2010 for A.Y. 2007-08 this ground w .....

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der section 154 r.w.s. 201(1) of the Act to highlight that the demand raised under section 201(1) in respect of non-deduction of tax at source was already cancelled by the AO, in which event the appeals filed by the Revenue are of academic importance and therefore deserve to be dismissed without going into the reasons given by the CIT(A). In other words, there is no tax impact in the appeals filed by the Revenue on account of the fact that the AO rectified his earlier order passed under section .....

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he Department. However, by the time the cases were called upon for hearing the CIT-DR left the court room without informing anybody. She was hardly present in the court for about 30 minutes, i.e. from 10.30 a.m. to 11.00 a.m. only to seek adjournment in all the cases assigned to her on the ground that though she had got the intimation on Friday itself that she has to appear before 'D' Bench but due to intervening holidays she could not prepare the cases. This cannot be a valid reason for .....

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