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TMI Blog2025 (4) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... in facts and circumstances of the case and in law, has erred in not appreciating that the TPO has disallowed the intra group services not merely on the issue of non-substantiation of commercial expediency by the assessee but also on the failure of the assessee to fulfil criteria stipulated under Rule 10D of the IT Rules and on several other factors? C. Whether the ITAT, in facts and circumstances of the case and in law, has erred in holding that the TPO has re-characterized the intra group services transaction? Re: Circuit Accruals D. Whether the ITAT, in facts and circumstances of the case and in law, has erred in deleting the disallowances on the ground that the provision for circuit accrual charges was made on a scientific and automated basis, without appreciating that the assessee has itself submitted that the said provision was created for estimated expenses? E. Whether the ITAT, in facts and circumstances of the case and in law, has erred in deleting the disallowances made by the AO the provision for circuit accrual charges was made on a scientific and automated basis, without appreciating that the assessee failed to produce any documentary evidence/invoices in suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the ITAT, in facts and circumstances of the case and in law, has erred in not appreciating that the right to operate and use the telecom license ensured to the assessee beyond the present assessment year and it was only quantification thereof, which was carried out periodically? M. Whether the ITAT, in facts and circumstances of the case and in law, has erred in not taking cognizance of the fact that the payment for maintenance and use of license fee relates to the initial setting-up of business? N. Whether the ITAT, in facts and circumstances of the case and in law, has erred in not appreciating that though computation of license fee was made with reference to the gross revenue, however there was no revenue sharing between the assessee and department of telecommunication? O. Whether the ITAT, in facts and circumstances of the case and in law, has erred in not appreciating that the payments made by the assessee under the New Telecom Policy, 1999 were in continuation of the payments made under the earlier policy of 1994, the said payments were admittedly treated as payments in the capital field? P. Whether the ITAT, in facts and circumstances of the case and in law, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enoted order of 29 July 2024. 6. Question 'K' to 'Q' and which is placed under the broad heading of 'revenue share based payment' pertains to amortization of revenue share based license fee and would have to be examined in light of the decision of the Supreme Court in Commissioner of Income-Tax vs. Bharti Hexacom Ltd. [2023 SCC OnLine SC 1340]. The aforesaid question would thus merit further consideration. 7. The appellant under the broad heading of 'Non-Deduction of TDS on Lease line expenses' has also posited question 'R'. However, Mr. Jolly, learned senior counsel appearing for the respondent- assessee has drawn our attention to the following conclusions which form part of the order of the Tribunal made with respect to AY 2012-13. We deem it apposite to extract paragraph 42 of that order herein below: - "42. We have considered the rival arguments made by both the sides and perused the orders of the authorities below. We have also considered the various decisions cited before us. We find the Assessing Officer disallowed an amount of Rs. 6,50,79,639/- paid by the assessee on account of leaseline expenses which were paid to other telecom operators for provision of telecom conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in 330 ITR 175 (Bom) in support of his contentions. For levy of interest u/s 234C, he recorded that such interest is levied only on returned income and not on assessed income. 9.2. In reply, the Ld.D.R., though not leaving his ground, submitted that he relies on the order of the A.O. and the reasoning thereof for disallowance made u/s 40A(i)(a) of the Act. 9.3. On the additional grounds the Ld.D.R. submitted that the A.O. may be directed to examine the same, if the Tribunal chose to admit these grounds. 10. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record and orders of the authorities below, case laws cited, we hold as follows. 11. We first take up corporate tax issues which is ground no.5 for the A.Y. 2007-08. The assessee is a licensed internet provider. During the year it procured, domestic half circuit facility to its customers from Telecom Service Providers like BSNL, MTNL, and international half circuit facility from Flag, Atlantic, at France. These are standard facilities provided for transmission of data by those organisations. The issue is whether tax should be deducted at so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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