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2022 (6) TMI 737 - AT - Income TaxTDS u/s 195 - Disallowance of Primary Rate Interface (PRI) Line charges paid to Telecom Companies on account of non-withholding of taxes - submission of the assessee is that the subordinate authorities have erred in disallowing the charges paid to Telecom Companies such as Bharati Airtel, Tata Communications and Vodafone Cellular u/s. 40(a)(ia) by treating the same as leased line charges and not appreciating the fact that the above charges were for standard PRI line charges which require no human intervention and consequently does not qualify as fees for technical services - HELD THAT - As decided in favour of the assessee in the case of Pr. CIT-2 Vs. Lee Murihead (P) Ltd. 2019 (4) TMI 1871 - BOMBAY HIGH COURT we direct the A.O./T.P.O. to delete the addition on lease line charges from the hands of the assessee. Accordingly, this ground of appeal of the assessee is allowed.
Issues involved:
- Disallowance of Primary Rate Interface (PRI) Line charges paid to Telecom Companies due to non-withholding of taxes - Transfer pricing adjustments - Education cess Issue 1: Disallowance of PRI Line charges The appeals involved disputes arising from orders of the Disputes Resolution Panel for different assessment years. The primary issue was the disallowance of PRI Line charges paid to Telecom Companies due to non-withholding of taxes. The assessee argued that the charges were for standard PRI line services, not fees for technical services. Citing a decision by the Hon'ble Jurisdictional High Court, the Tribunal directed the tax authorities to delete the addition on lease line charges, as the charges did not require human intervention and were not subject to withholding taxes. Consequently, the ground of appeal on this issue was allowed for all relevant assessment years. Issue 2: Transfer pricing adjustments The appeals also involved transfer pricing adjustments, which the assessee chose not to press. The Tribunal, after hearing the parties, dismissed the grounds relating to transfer pricing adjustment additions as not pressed. This decision was consistent across all relevant assessment years. Issue 3: Education cess Another issue raised was regarding education cess, which the assessee also chose not to press. The Tribunal, after hearing the parties, dismissed the ground of education cess as not pressed. This decision was uniform for all relevant assessment years. In conclusion, the Tribunal allowed the appeals partly or fully, depending on the specific issues raised in each appeal. The decision to delete the addition on lease line charges due to non-withholding of taxes was consistent across all assessment years. The Tribunal dismissed the grounds related to transfer pricing adjustments and education cess as not pressed, maintaining uniformity in its rulings.
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