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2024 (6) TMI 935 - AT - Income TaxIssues: The judgment involves appeals by the assessee against the orders of the Assistant Commissioner of Income Tax for Assessment Years 2018-19 and 2019-20, challenging the addition of income under section 143(3) read with section 144C(13) of the Income-tax Act, 1961, related to fees for technical services (FTS) and other charges. Assessment Year 2018-19: The appellant contested the assessment order alleging errors in assessing the income, proposing additions, computing tax at the wrong rate, levying interest, and initiating penalty proceedings under various sections of the Act. The appellant argued that the charges received were not FTS but connectivity charges, citing judicial precedents. The Department contended that the services provided were technical, managerial, and consultancy services, falling under FTS. The Tribunal examined the services provided, agreements, and responsibilities, concluding that the amounts in question did not qualify as technical or managerial services, citing the Bharti Airtel Ltd. case. The appeal was partly allowed for statistical purposes. Assessment Year 2019-20: Similar issues were raised for this assessment year, including errors in the assessment order, additions made, failure to grant credit for taxes deducted at source, levying interest, and initiating penalty proceedings. The appellant reiterated that the charges were connectivity charges, not FTS, based on legal precedents. The Department argued that the services provided were technical, managerial, and consultancy services, falling under FTS. The Tribunal analyzed the nature of services, agreements, and responsibilities, determining that the amounts did not qualify as technical or managerial services, as per the Bharti Airtel Ltd. case. The appeal was partly allowed for statistical purposes. Conclusion: The Tribunal examined the nature of services provided by the assessee, the agreements in place, and the responsibilities undertaken, concluding that the amounts received as reimbursement of connectivity charges did not constitute fees for technical or managerial services. The Tribunal allowed the appeals partly for statistical purposes, citing relevant legal precedents and the specific details of the case.
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