TMI Blog2020 (2) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... International Ltd. [ 2011 (2) TMI 1110 - ITAT, AHMEDABAD] has held that section 206C will apply only to those sellers who are engaged in the business of manufacturing or mechanical working of materials. Thus, on consideration of these facts, we direct the Assessing Officer to delete the demand made on account of non-collection of TCS and interest thereon. Accordingly ground No. 2 is also allowed. - ITA No.594/Ind/2018 - - - Dated:- 5-2-2020 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : None For the Respondent : Shri V.J. Boricha, Sr. DR ORDER PER KUL BHARAT, J.M: This appeal by the assessee is directed against the order of the Ld. CIT(A)-1, Indore dated 20.3.2018 for the A.Y. 2009-10. 2. The first ground raised by the assessee is that ld. CIT(A) has erred in confirming the order of the Assessing Officer who had concluded that the co. ought to have deducted tax u/s 194J on payment made to M/s. BSNL and M/s. Bharti Airtel Ltd. towards internet charges. Facts giving rise to ground are that the Assessing Officer noted that the assessee made the payment of ₹ 3,13,569/- for using i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard rival submissions and perused material on record including the paper book details and case laws. We find that the AO ITA No. 433/Kol/2016 on going through the details as submitted by the assessee found that the assessee made payments of ₹ 69,43,089/- under the head Leaseline charges to various parties like BSNL,MTNL, Tata Indicom, System Shyam Teleservices Ltd, Bharti Airtel etc. The AO raised an objection for non deduction of TDS on such payments u/s. 194C and 194J of the Act. The assessee contended that these payments were made towards monthly rental for broadband usage charges in different locations. Such payments were made for use of standard facilities and the provisions of section 194C and 194J of the Act are not applicable as there was no contract for carrying out any work and the payment was not a fee for technical services. In support of this contention, the assessee placed on various case laws before the AO. The AO found that the submissions of the assessee is not acceptable and for non deduction of TDS u/s. 194C and 194J of the Act on such payments charged interest @ 1% p.m upto 38 months i.e. at ₹ 8,32,040/- and added the same to the total income of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would lead credence to its authenticity is provided for by the Stock Exchange.All such services, fully automated, are available to all members of the stock exchange in respect of every transaction that is entered into. There is nothing special, exclusive or customised service that is rendered by the Stock Exchange. Technical services like Managerial and Consultancy service would denote seeking of services to cater to the special needs of the consumer/user as may be felt necessary and the making of the same available by the service provider. It is the above feature that would distinguish/identify a service provided from a facility offered. While the former is special and exclusive to the seeker of the service, the latter, even if termed as a service, is available to all and would therefore stand out in distinction to the former. The service provided by the Stock Exchange for which transaction charges are paid fails to satisfy the aforesaid test of specialized, exclusive and individual requirement of the user or consumer who may approach the service provider for such assistance/service. It is only service of the above kind that, according to us, should come within the ambi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid reasons, we hold that the view taken by the Bombay High court that the transaction charges paid to the Bombay Stock Exchange by its members are for 'technical services' rendered is not an appropriate view. Such charges, really, are in the nature of payments made for facilities provided by the Stock Exchange. No TDS on such payments would, therefore, be deductible under Section 194J of the Act. ITA No. 433/Kol/2016 We thus in light of the aforesaid settled position of law so laid down by the Hon'ble Apex Court, therefore set aside the order of the CIT(A) holding the assessee as being in default u/ss. 201(1)/201(1A) for failing to deduct tax at source on payments made towards internet and communication charges. The Ground of appeal No. 1 raised by the assessee before us is allowed. 7. In view of the above, we set aside the impugned order of the CIT-A. Accordingly, the grounds raised by the assessee in the appeal are allowed. 8. In the result, the appeal of the assessee is allowed. 6. On consideration of above, the Assessing Officer is directed to delete the demand of ₹ 67,271/-. Accordingly, the ground no.1 raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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