TMI Blog2016 (2) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... source under the provisions of section 194J. Allowable busniss expenditure - lease rent payment - Held that:- The assessee had claimed the expenditure as per the provisions of AS-19, that the agreement entered into by the assessee was in the nature of operating lease as defined in AS-19, as per the accounting standard in such cases the payments have to be considered as an item of P&L account on a straight line basis over the lease period. The FAA had given a categorical finding of fact that the provision of ₹ 1. 08 crores was in respect of the liability that had accrued during the FY 2009-10. By following AS-19 the assessee has complied with the provisions of the Act, that AS-19 provides that in case of operating leases, the lease rent payment has to be treated as an allowable expenditure. Therefore, in our opinion, the order of the FAA does not require any interference from our side. - ITA No. 3137/Mum/2014, ITA No. 3502/Mum/2014 - - - Dated:- 19-2-2016 - S/Sh. Rajendra, Accountant Member Ram Lal Negi, Judicial Member Assessee by : Shri Yogesh Thar-AR Revenue by : Shri B. D. Naik-DR ORDER Per Bench, AM Challenging the order, dated 06. 02. 2014 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the and admitted the fresh evidences. After considering the available material, he held that payment towards D/CBC fell squarely under the provisions of Section 194 J of the Act, that the assessee was liable to deduct tax while crediting the said payment, that there was human intervention at all levels by the service providers, that the soul and the substance of the agreement revealed that at micro level all activities included the human intervention, that the services availed by the assessee were of technical nature. Following his order for the AY. 2007-08, the FAA dismissed the appeal filed by the assessee. 4. Before us, the Authorised Representative(AR)stated that services provided by the eight entities were not of technical nature, that human intervention was absent in the services provided to the assessee, that he relied upon the cases of Siemens Limited(ITA/4356/Mum/2010), iGate Computer System Ltd. (67SOT296), Torry Harris Business Solution(P. )Ltd. (155ITD122). He further argued that the payees have paid the taxes and that the FAA had not adjudicated the said issue. Departmental Representative(DR)contended that orders of the FAA should be upheld. 5. We have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnect towards rendering / availing technical services. However, the AO held that the DATA link charges was the fee paid for technical services rendered by the service provider and the assessee should have deducted tax at source under the provisions of section 194J of the Act. The matter travelled to the Tribunal and it decided the issue as under: 15. We have heard the rival contentions and perused the record. The assessee was engaged in software development, software export and allied activities. TDS Survey under section 133A of the Act was conducted on the premises of the assessee on 13. 01. 2009. The assessee was found to have made payments against DATA link charges to various telecom service providers. The ACIT-TDS was of the view that the assessee was liable to deduct tax at source out of such DATA link charges paid to various telecom service providers being professional services provided by the said service providers, in view of section 194J of the Act. The explanation of the assessee in this regard was that the said payments for DATA link charges were paid for using standard facilities provided by the service providers by using technical gadgets, which were made availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The DATA link charges were paid for utilizing the standard facilities which were provided by the individual service providers by way of use of technical gadgets which were made available vide DATA link satellite link line established from one service provider to be carried over to the other service provider, does not involve technical services as there was only interconnection of the networks to the equipments of other service providers. In the absence of any human intervention for transmitting the DATA through such DATA link satellite link line, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act. Accordingly, we reverse the finding of CIT(A) in this regard and hold that DATA link charges of ₹ 8, 32, 46, 468/- were not liable for tax deduction at source under the provisions of section 194J of the Act. We find that while deciding the appeal the Tribunal had considered all the cases that were available at time and were dealing with the identical issue. So, respectfully following the above order of the Tribunal, we decided ground no. 1 in favour of the assessee. As the main ground has been deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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