TMI Blog2018 (4) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... ICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Shri M.S.A. Khan, CIT-D.R. For The Assessee : Shri S.N. Soparkar, A.R. ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER : These are two appeals by the revenue alongwith cross objection by the revenue against the order of the Commissioner of Income Tax (Appeals)-8, Ahmedabad, dated 02/03/2016 for Assessment Year (AY) 2011-12 2012-13. 2. Since both appeals have common grounds and assessee is same therefore, for the sake of convenience, we would like to dispose of both appeals by way of a common order. In these appeals following Grounds have taken: 1. The Ld. CIT(A) has erred on facts and in law in deleting the demand raised u/s.201(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken on the issue of treatment of roaming charges as fees for technical services liable for TDS u/s.194J of the Act , in the form off statement u/s.131 of the Act of Shri Rajiv Kushwah, Director, TERM Cell, Gujarat, Department of Telecommunications on 11.03.2014. 3.3 On the basis of the statement a show cause notice was issued to the assessee (along with a copy of the expert opinion). An opportunity to cross examine the expert was given by the ld. AO but assessee failed to avail the opportunity of cross examination of the expert in this regard. 3.4 It was observed by the A.O. that the assessee was not deducting TDS u/s.194] (fees for technical services) on the IUC charges paid by the assessee company, and treated assessee as as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distributor by subtracting the price/value at which the vouchers were sold to its distributors from the M.R.P. value of such coupons has been furnished by the assessee in its submission dated 26.03.2014. The value arrived at and provided by the assessee of such commission is ₹ 77,93,41,990/-. It was observed by the ld. AO that no tax has been deducted u/s.194H of the I.T.Act on above payment. 3.6 In this regard the assessee has stated that since there is no Principal-Agent relationship between the assessee and the distributors, hence the assessee has treated the amount paid to pre paid distributors as discount and not as commission. The assessee has mentioned the agreement entered in F.Y.2007-08 between the distributors in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riber. 8. Roaming services are provided by telecom operators are in the nature of use of standard facilities, which do not require any human interface. Further, since the roaming charges are not paid for rendering managerial, technical or consultancy services, said services cannot be construed as fees for technical series as defined under provisions of section 194J of the Act. Therefore, the assessee is not required to deduct tax at source on such roaming charges. 9. As regard to applicability of provisions of section 194H of the Act on the discount offered to pre-paid distributors is concerned. Ld. AR stated that arrangement between the appellant and its prepaid distributors was on a principal to principal basis , wherein the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided in the following manner: 21. We have heard rival submissions. We put up a specific query to Revenue as to whether there is any direct evidence pinpointing human intervention element in assessee's roaming facilities availed from its payees. No material is quoted in response to our query except page 71 of the assessment order. Meaning thereby that there is only an inference that the assessee must have paid for the impugned roaming charges involving human intervention component. This case file reveals that this tribunal's Kolkata bench in ITA No.l864/Kol/2012 Vodafone East Ltd. (assessee's sister concern) vs. ACIT decided on 15.09.2015 examines all fine points in case of identical roaming charges in cellular tele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time is thus sold to the distributors and its recommended retail price to the end consumers. 8. This issue is no longer res Integra. As the same business model, with no or peripheral variations, has been followed by almost all the operators in the mobile telecommunication industry, this issue has been subject matter before various forums, and more importantly, before various Hon'ble High Courts. Learned Representatives fairly agree that the above issue in appeal is subject matter of difference of opinion by various Hon'ble non-jurisdictional High Courts and that we do not have the benefit of guidance by Hon'ble jurisdictional High Court. 9. This issue is covered, in favour of the assessee, by Hon'ble Karnataka Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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