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TMI Blog2017 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 194-I of the Act are not applicable where the assessee has not claimed the deduction of the expenses. The AO is directed accordingly. The ground raised by the assessee is allowed. TDS liability on internet charges and leaseline charges - whether TDS u/s 194-C or 194-I or 194-J - Held that:- Assessee has availed internet services and paid internet /lease charges for the same. According to the AO, the said payment of lease rent/internet charges were liable to tax u/s 194-I of the Act. As per the contentions of assessee he has only availed the internet connection and was not using any asset, plant or machinery which involved payment of rent. In our considered view these charges are not falling within the provisions of section 194-I. Mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai-400013 during which certain discrepancies were found in the deduction of tax at source. The AO found that the assessee has not deducted TDS on ₹ 2,83,91,800/- on account of provisions for rent which were charged to profit and loss account. The AO also observed that in the tax audit report bearing form no.3CD part B serial no.17(f), it is stated that the assessee declared inadmissible expenses u/s 40(a)(ia) of the Act on account of rent of ₹ 2,83,91,800/-. Since TDS payable under section 194-I of ₹ 64,33,582/- has not been deducted and paid and accordingly, the AO asked the reasons for the same, which was replied by the assessee by submitting that this was not actual rent paid but only provisions created towards rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease of rent to the tune of ₹ 28,22,889/- and was accordingly provided in the year ended 31.3.2008 but the same was disallowed while filing the return of income u/s 40(a)(ia) of the Act. The AO rejected the contentions of the assessee by holding that the assessee was liable for u/s 194I of the Act by treating the assessee in default under the provisions of section 201 and 201(1A) of the Act and raised demand of TDS plus interest accordinly. 5. In the appellate proceedings, the ld. CIT(A) also decided the issue against the assessee by observing that the rent debited to the profit and loss account was liable for TDS u/s 194-I and now aggrieved by the order of the FAA, the assessee is in appeal before us. 6. We have carefully con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advance Technologies Ltd on which according to AO TDS u/s 194-I of the Act has not been deducted. Accordingly, the AO(TDS) issued notice to the assessee which was replied by the assessee by submitting that the payment to the above said company was for the internet connection and not for use of any plant or equipments and therefore the provisions qua TDS were not applicable either u/s 194-C or 194-I or 194-J of the Act In support his contention, the ld. AR relied on the following decisions : i) Sktcekk Communication Ltd V/s DCIT (2001) 251 ITR 53) Madras High Court; ii) Wipro Ltd V/s ITO (2004) 80 TTJ 191) (Bangalore Tribunal); iii) CIT V/s Bharti Cellur Lte CIT V/s Escotel Mobile Communication Limited, CIT V/s Hutchinson Essar Tel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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