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M/s. Idea Cellular Ltd. Versus The ITO, Ward- TDS -2, Jaipur

2016 (5) TMI 905 - ITAT JAIPUR

Non-deduction of tax u/s 194H - discount allowed to the prepaid distributors - demand u/s 201(1)/201(1A) - Held that:- 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 (9) TMI 1358 - ITAT .....

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. 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/2013 for the assessment year 2011-12 wherein the assessee has raised following grounds:- (i) The ld. CIT(A) has failed to consider and .....

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A No. 293/JP/2014 for the assessment year 2011-12 wherein the assessee has raised following grounds:- 1. On the facts and in circumstances of the case and in law the ld. CIT(A) erred in treating the appellant as assessee in default us 201(1) r.w.s. 194H of the Act without ascertaining and proving that whether the recipient had paid taxes on the alleged income received / receivable from the Appellant as required u/s 191 of the Act. 2. The appellant prays that the order passed by the ITO -TDS -2 J .....

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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 .....

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sence of any payment or credit to the Distributors, the appellant should not be treated as an assessee in default u/s 201 r.w.s. 194H of the Act. 4.1 Apropos Ground No. 1, the ld. AR of the assessee contends that the same is infructuous as subsequently an order u/s 154 in this behalf has been passed. 5.1 Assessee has raised an additional ground contending it to be purely legal in nature as under:- 1. On the facts and in the circumstances of the case, the ld. CIT(A) erred in holding that Section .....

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had not filed any appeal before the 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. t .....

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observations:- A. On applicability of Section 194J Human intervention is required only for installation/ setting up/repairing/servicing/ maintenance / capacity augmentation of the network. But after completing this process, mere interconnection between the operators while roaming is done automatically and does not require any human intervention and accordingly cannot be construed as technical services. It is common knowledge that when one of the subscribers in the assessee's circle travels t .....

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C Provisions of Section 194C would become applicable only where some work (works contract) is being carried out and there is some human intervention involved in the carriage of such work. For carrying out any work, manpower is sine qua 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 p .....

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he equipment and has paid the roaming charges to the other service provider with whom it has entered into a national roaming agreement. We hold that it is not possible to say so because if at all everyone can be said to have used the equipment is can only be the subscriber of the assessee but not the assessee. If anything the assessee is placed in a position of a mere facilitator between its subscriber and the other service provider, facilitating a roaming call to be made by the subscriber. The .....

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