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TMI Blog2016 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that Clickatel which is a nonresident carrier rendered services outside India and no part of the payment made to Clickatel is chargeable to tax in India. The Commissioner of Income Tax (Appeals) also followed the decision of Hon’ble Supreme Court in the case of CIT Vs.Bharti Cellular Ltd. (2010 (8) TMI 332 - Supreme Court of India) on the issue. The Hon’ble Delhi High Court the case of CIT Vs. Bharti Cellular Ltd. (2008 (10) TMI 321 - DELHI HIGH COURT ) held that these services do not involve human intervention and these services cannot be regarded as fee for technical services. No good reason to interfere with the decision of the Commissioner of Income Tax (Appeals) in holding that payment made by the assessee to Clickatel is not fees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the authorized person to sign necessary documents, the cross objection was filed belatedly. We have gone through the affidavit filed by the assessee and we are of the opinion that there is good and sufficient reason for filing the cross-objection belatedly. Accordingly, the delay is condoned and the cross-objection is admitted for adjudication. 3. The first ground in Revenue s appeal is with regard to deleting the disallowance made u/s.40(a)(i) in respect of carrier payments made to M/s. Clikatel, South Africa without deduction of tax at source. 4. We have heard both the parties. In our opinion, the same issue was considered by this Tribunal in assessee s own case for the assessment year 2009-10 in ITA No.1030/Mds/2013 CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes under technical services, the provisions of Double Taxation Avoidance 'Agreement (DTAA) need to be looked into. When the appellant enters into a transaction with a non-resident, the provisions of the Income Tax Act or the Double Taxation Avoidance Agreement (DTAA) whichever is favourable shall apply. As per DTAA between India and South Africa, the fee for technical service has been defined as, payments of any kind received as a consideration for services of a managerial, technical or consultancy nature, including the provision of services by technical or other personnel, but does not include payments for services mentioned In Article 15. It is seen from the facts of the' case that the nature of services rendered by the nonre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia the provisions of section 5 cannot be applied to the payment made to the nonresident Carrier so as to make it taxable in India. It is also seen that the non-resident Carrier does not have any permanent establishment in India. Further, in order to attract section 195, the services by the non-resident Carrier should have been rendered in India and also should have been used in India.' It is to be noted that Section 195 of the Act has to be read along with the charging sections 4, 5 and 9 of the Act and the provisions of the Tax Treaties and the combined reading of the aforesaid sections clearly indicate that unless the income is chargeable to tax in India, there is no obligation to withhold the tax. b) The AO has viewed that Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT Vs.Bharti Cellular Ltd. (330 ITR 239 ) on the issue. The Hon ble Delhi High Court the case of CIT Vs. Bharti Cellular Ltd. (319 ITR 139) held that these services do not involve human intervention and these services cannot be regarded as fee for technical services. The Hon ble Madras High Court in the case of Verizon Communications Ltd. Vs. ITO in T.C.(Appeal) Nos. 147 to 149 of 2011 and 230 of 2012 dated 7.11.2013 held that collection of fees for usage of standard facility would not amount to payment made for providing technical services. In the circumstances, we do not find any good reason to interfere with the decision of the Commissioner of Income Tax (Appeals) in holding that payment made by the assessee to Clickatel is not fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in future years are not liable to tax in the year of receipt. Only on completion of the service, the appellant has right over the amount that was received in advance. .In view of the above, the action of the AO is not justified in making the above disallowance of ₹ 1,33,01,684/- and hence directed to be deleted. This ground of appeal is allowed. 14. On reading of the above order, we do not find any good reason to interfere with the findings of the Commissioner of Income Tax (Appeals). Thus, the ground of appeal raised by the Revenue on this issue is rejected. In view of the above decision of this Tribunal, we confirm the finding of the CIT(Appeals) and dismiss this ground of appeal of the Revenue is dismissed. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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