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2016 (12) TMI 488 - ITAT MUMBAI

2016 (12) TMI 488 - ITAT MUMBAI - TMI - Non-deduction of tax at source u/s.194J - non deduction of tds on amount paid on account of internet charges - Held that:- ITAT in the case of M/s Kotak Securities Ltd. (2012 (2) TMI 77 - ITAT MUMBAI ), wherein it was held that no TDS is required to be deducted in respect of bank guarantee charges paid to bank, accordingly assessee cannot be said to be in default for such non-deduction of TDS on such payment. Facts of the instant appeals are similar, respe .....

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ns are on principal to principal basis and the element of agency which is essential to cover it as 'commission' as per Explanation to section 194H is absent. - Appeal of the Revenue is dismissed whereas appeal of the Assessee is allowed. - ITA No.5589/Mum/2014, ITA No.5158/Mum/2014 - Dated:- 2-12-2016 - SHRI R.C.SHARMA, AM and SHRI RAVISH SOOD, JM For The Assessee : Shri Vijay Mehta For The Revenue : Shri A.K. Dhandial ORDER PER R.C.SHARMA (A.M): These are the cross appeals filed by the asse .....

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rges of ₹ 1,95,64,794/- paid without deducting tax at source u/s.194A(3). 3. By the impugned order, CIT(A) confirmed the action of the AO with regard to internet charges, whereas in respect of bank guarantee charges held in favour of assessee. 4. Against the above order of CIT(A), both revenue and assessee are in further appeal before us. 5. Learned AR placed on the order of the tribunal in assessee s own case for the assessment year 2009-10 dated 29/04/2016, wherein both the issues were d .....

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he Assessing Officer was not approved by the CIT(Appeals) following the ratio of the judgment of the Hon'ble Madras High Court in the case of Skycell Communications Ltd. vs. DCIT, 251 ITR 53(Mad). For the said reason, Revenue is in appeal before us. 4. Before us, the Ld. Representative for the respondent assessee, at the outset, pointed out that in the assessee's own case for the same ITA No. 4884/MUM/2014 (Assessment Year : 2009-10) year with another TAN particulars, similar decision of .....

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ailed, which shows that the Revenue did not agitate the decision of the CIT(Appeals) in relation to the requirement of TDS on payment made for internet charges. 5. The aforesaid factual matrix has not been disputed by the Ld. Departmental Representative. It is quite evident from record that in the instant case the CIT(Appeals) has followed the decision of the another CIT(Appeals) -14, Mumbai dated 15/10/2013(supra) on a similar issue, which has been accepted by the Revenue inasmuch as no appeal .....

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thin the meaning of 'fee for technical services' so as to be liable for deduction of tax at source under section 194J of ITA No. 4884/MUM/2014 (Assessment Year : 2009-10) the Act, as it is a payment for obtaining a standard facility and not for technical services. Thus, on this aspect Revenue has to fail. 6. In Grounds of appeal No.3, the case set up by the Revenue is that the CIT(Appeals) has erred in holding that bank guarantee charges paid to the bank are not liable for deduction of t .....

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194H is absent. 6.2 At the time of hearing, Ld. Representative for the assessee also referred to other decisions of the Tribunal on this aspect in support of the conclusion of the CIT(Appeals). Be that as it may, in the absence of any contrary decision and the CIT(Appeals) having followed the decision of the jurisdictional Tribunal, we find no reason to interfere in the conclusion drawn by the CIT(Appeals). In this view of the matter Revenue has to fail on this aspect also. 6. We have carefully .....

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(supra), wherein it was held that no TDS is required to be deducted in respect of bank guarantee charges paid to bank, accordingly assessee cannot be said to be in default for such non-deduction of TDS on such payment. Facts of the instant appeals are similar, respectfully, following the order of the Tribunal in the case of Kotak Securities (supra), we do not find any infirmity in the order of CIT(A) holding that assessee is not in default for non-deduction of TDS on such payments. Accordingly, .....

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w laid down by the Tribunal in the case of Facets Polishing Works (P) Ltd. Vs. ITO(TDS) [69 SOT 361(Ahd)], a copy of which is placed on record. However, the AO held that assessee should have deducted tax u/s.194J. 8. The only dispute is as to whether maintenance charges is subject to deduction u/s.194C or 194J. The assessee has deducted tax u/s.194C, whereas the AO held that payment was made for technical services, therefore, liable for deduction of tax u/s.194J. 9. The issue is also covered by .....

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