TMI Blog2017 (1) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... - We find that the issue in appeal has been decided in assessee’s own case by the coordinate bench holding that payments made for purchase of off the shelf software does not fall under the definition of fees for technical services so as to invoke the provisions of Sec. 194J of the Act. Thus, respectfully following the said order we hold that there is no merit in holding that the assessee is a defaulter u/s 201(1) for non-deduction of TDS u/s 194J of the Act on the payments made to purchase software. The grounds raised by the assessee are allowed. - I.T.A. No.3803/Mum/2015 - - - Dated:- 18-1-2017 - SHRI C.N. PRASAD, JM, AND SHRI N.K. PRADHAN, AM Appellant by : Smt. Neha Barve Respondent by : Shri. Rajesh Ojha O R D E R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges u/s 194J of the Act. 4. The Ld. Counsel for the assessee at the very outset submits that an identical issue has come up before the coordinate bench of the Tribunal in assessee s own case for the assessment year 2010-11 in ITA No. 3504/M/2014 dated 2/08/2016, holding that the provision u/s 194J have no application for the payment made towards internet charges. A copy of the order is placed on the record. 5. We have perused order of the coordinate bench of the Tribunal in assessee s own case and find that the issue under consideration has been decided in favor of the assessee by observing as under :- 5. We have considered rival contentions. The issue under consideration is squarely covered by various decisions of High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rges do not come under TDS provisions and therefore no deduction is required u/s.194J, as the provision is not applicable. 7. In view of the above discussion, we do not find any merit in the action of lower authorities for holding the assessee in default for non-deduction of tax at source in respect of payment for internet charges. 6. Respectfully following the above decision we hold that the payments made by the assessee towards internet charges does not fall within the definition of technical services as envisaged in the provisions of Sec. 194J of the Act. Therefore, we do not find merit in the action of the Assessing Officer in holding that the assessee is in default for non-deduction of TDS u/s 194J in respect of the payment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s below. 9. We have heard rival submissions, perused the order of the authorities below and the decision of the coordinate bench in assessee s own case. The Tribunal has considered this issue as to whether the purchase of software by the assessee would fall under fees for technical services so as to attract the provisions of Sec. 194J or not. It was held that the provisions of Sec. 194J have no application observing as under :- 11. We have considered rival contentions. Explanation 2 of Section 9(vii) defines the words 'Fees for Technical Services' as any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services. A perusal of the aforesaid definition clarifies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ware as the payments made for technical services offered to the assessee, therefore, the expenses incurred for purchase of software is in the nature of technical services provided by vendor and the same is to be subjected to TDS under the provisions of Sec. 194J for deducting tax at source. 11. On a careful consideration of the above order, we find that the issue in appeal has been decided in assessee s own case by the coordinate bench holding that payments made for purchase of off the shelf software does not fall under the definition of fees for technical services so as to invoke the provisions of Sec. 194J of the Act. Thus, respectfully following the said order we hold that there is no merit in holding that the assessee is a defaulter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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