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TMI Blog2024 (6) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificates certifying the products and services. Revenue treated these services as not only technical in nature but also managerial and consultancy services against the fact that assessee has only paid for connectivity services and the services are merely ancillary to enabling the provision of inter-connect services and part of the processing the product. Hence, in our considered opinion, the amounts cannot be treated as technical or managerial or consultancy services. The Reliance is being placed on the judgment of Bharti Airtel Ltd. [ 2024 (1) TMI 804 - SC ORDER] The assessee has earned 1% markup on the reimbursement of connectivity charges. This is the amount earned by the assessee in the entire transaction. The AO may invoke relevant provisions of the Income Tax Act and the DTAA for taxing of the said income earned. - Dr. B.R.R. Kumar, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Appellant : Sh. Deepak Chopra, Ankul Goyal S. Adwiteya Grover, Advs For the Respondent : Shri Vizay B. Vasanta, CIT DR ORDER PER YOGESH KUMAR U.S. JM.:- Both the appeals are filed by the assessee against the order of Assistant Commissioner of Income Tax, Circle International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case and in law, the Learned AO erred in levying interest under section 234A, 234B and 234C of the Act. 8. That on the facts and circumstances of the case and in law, the Learned AO erred in initiating penalty proceedings under section 270A of the Act. The grounds of appeal herein above are independent and without prejudice to each other. The Appellant craves leave to alter, amend and/or withdraw the Ground(s) of Appeal herein or add any further grounds as may be considered necessary and to submit such statements, documents and papers as may be considered necessary either before or during the appeal hearing. ITA No.1815/Del/2022 (A.Y 2019-20) 1. That on the facts and in the circumstances of the case and in law, the Learned Assessing Officer (AO) erred in passing the impugned assessment order dated July 7, 2022 under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (Act') pursuant to the directions of the Hon'ble Dispute Resolution Panel-1 (hereinafter referred to as the Hon'ble DRP ) in assessing the income of the Appellant at INR 3,85,08,696/-. 2 That on the facts and in the circumstances of the case and in law, the Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of telecommunication products. The assessee filed Income Tax return for A.Y 2018-19 on 08-03-2019 declaring Nil income and claiming refund of Rs 35,37,310/-. The case was selected for scrutiny and e-notice u/s 143(2) of the Income Tax Act (hereafter 'the Act') dated 22-09-2019 was issued and served upon the assessee. Subsequently, notices u/s 142(1) of the Act along with detailed questionnaires were issued on 18/11/2020 and 07/04/2021. In compliance to the Notices, assessee filed various details. During the year under consideration, the assessee received reimbursement of connectivity charges from Huawei Telecommunications (India) Company Pvt. Ltd ('Huawei India') for provision of connectivity services for international communication. As India and Hong Kong did not have any double taxation avoidance agreement during the concerned assessment year, the assessee was show caused as to why the total consideration received by it, amounting to Rs. 3,27,11,391/- during the concerned previous year, should not be held as Fee for Technical Services (FTS) under section 9(i)(vii) of the Income Tax Act, 1961 and added to its assessed income. 4. The assessee contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for provision of connectivity services for international communication. Admittedly, India and Hong Kong did not have any double taxation avoidance of the Agreement during the concerned Assessment Years. The assessee was show caused why the consideration received by it during the concerned previous year should not be held as fee for technical Services (FTS) u/s 9(i)(vii) of the act. It is the contention of the assessee before the A.O. that the services provided do not constitute managerial services, the services provided do not constitute consultancy services and there is no human intervention involved in provision of connectivity services and thus, the services rendered do not constitute technical services. 8. We have gone through the Reimbursement of the connectivity charges placed at Page No. 89 of the Paper Book, Invoices produced at Page Nos. 90, 91, 92 and the statement showing computation of income at Page No. 93 and also gone through the agreement at Page No. 82 of the paper book containing the Responsibilities as per the purchasing service agreement between the assessee and the Huawei Telecommunications (India) Company Pvt. Ltd. ( Huawei India ) and the clauses mentioned a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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