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2016 (5) TMI 905

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..... ble for TDS in any of the sections i.e. 194C and 194J or 194I. In view thereof, the issue stands decided on merit in favour of the assessee - ITA No.678/JP/2013 & 293/JP/2014 - - - Dated:- 15-4-2016 - SHRI R.P.TOLANI, JM SHRI VIKRAM SINGH YADAV, AM For The Revenue by :Shri Raj Mehra, JCIT - DR For The Assessee : Shri Raunak Ji Doshi, CA ORDER PER R.P. TOLANI, JM Both these appeals have been filed by the assessee against two separate orders of the ld. CIT(A)-III, Jaipur dated 15-05-2013 for the assessee 2011-12 relating to demand u/s 201(1)/201(1A) of the I.T. Act and other order dated 18-02-2014 for the assessment year 2011-12 relating to order u/s 154 of the Act. 2.1 The grounds raised in in ITA No. 678/JP/2 .....

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..... On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the order passed by TDS officer u/s 201(1)/201)(1A) of the Act by treating the discount offered by the appellant to the distributor as commission and thereby treating the appellant as an assessee in default u/s 201(1) r.w.s. 194H of the Act. (2) The appellant most humbly prays that the discount allowed to the distributor be held as not liable to TDS u/s 194Hof the Act as the relationship between the appellant and its distributors is on Principal to Principal basis and thus the demand raised in the impugned order in respect of the alleged failure to deduct tax u/s 194H of the Act be deleted. Without prejudice to Ground No. 1 and II Ground .....

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..... Tribunal, he ought to have held that the provisions of Section 194C of the Act does not apply 3. The appellant prays that it be held that nodeduction of tax u/s 194C of the Act is warranted on payment made towards roaming charges to the OTOs and hence the appellant is not assessee in default u/s 201(1) of the Act. 5.2 After hearing both the parties we admit the additional ground purely legal in nature. 5.3 The ld. AR contends that on merits of the issue i.e. the action of the ITO in holding that the payment made for the use of standard facility amounts to being fees for technical services as defined in Explanation 2 to Section ((i)(vii) of the Act being liable to TDS u/s 194J of the Act; in respect of roaming charges pai .....

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..... non and without manpower, it cannot be said that work has been carried out. The word work in Section 194C referred to and comprehends only the activities of workman. It is the physical force which has comprehended in the word work . We have already held that the payment of roaming charges does not require any human intervention. Hence, in the absence of human intervention, the services rendered in the context of the impugned issue does not fall under the definition of work as defined in Section 194C and hence, the provisions of Section 194C are not applicable to the impugned issue. C. On applicability of Section 194-I For applicability of Section 194-I, the real test to be considered is whether it is possible to say that i .....

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..... on 194I of the Act. 5.4 Since the issue is squarely covered in favour of the assessee, the entire demand and interest thereon is unsustainable and liable to be deleted. 5.5 The ld. DR is heard 5.6 We have heard the rival contentions and perused the materials available on record. The impugned demand was raised against the assessee by holding it to be assessee in default for non-deduction of TDS by considering the payments made in respect of roaming charges to other Telecom Operators as liable for TDS either u/s 194J or 194C of the I.T. Act. The ITAT Kolkata Bench in the case of Vodafone East Ltd. vs. Addl. CIT, Range-7, Kolkata [2015] 61 taxmann.com 263 (Kolkata-Trib) and plethora of other judgments have settled that the payment .....

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