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TMI Blog2024 (7) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS is required to be made on the payment towards leased line/data link charges. Therefore, the order of NFAC is hereby reversed. The grounds of appeal raised by the assessee stands allowed. - Shri Inturi Rama Rao, Accountant Member And Shri Vinay Bhamore, Judicial Member For the Assessee : Shri Vidur Munjal Ms. Mahenov Thakkar (Virtual). For the Revenue : Shri Somnath M. Wajale. ORDER PER INTURI RAMA RAO, AM: These are two appeals filed by the assessee directed against the separate orders of National Faceless Appeal Centre (NFAC), Delhi dated 03.11.2023 for the assessment years 2015-16 2017-18. 2. Since the identical facts and common issues are involved in the above captioned appeals of the assessee, we proceed to dispose of the same by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, is whether or not the lower authorities were justified in disallowing the payment of leased line /data link charges paid by the assessee for non deduction of tax at source by invoking the provisions of section 40(a)(ia) of the Act. This issue is no more res integra as the same is settled in favour of the assessee by the Hon ble Supreme Court in the case of CIT Vs. Kotak Securities Ltd. 383 ITR 1 (SC) wherein it was held that the charges paid towards leased line are not in the nature of Technical services within the meaning of section 9(1)(vii) of the Act. The relevant paragraphs of the judgment of Hon ble Apex court read as under : 5. The relevant provisions of the Act which have a material bearing to the issues arising for determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... okerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of section 200: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub- section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 9(1)(vii) read with Explanation 2 comes in between the words managerial and consultancy services . 7. Managerial and consultancy services and, therefore, necessarily technical services , would obviously involve services rendered by human efforts. This has been the consistent view taken by the courts including this Court in Bharti Cellular Ltd. (supra). However, it cannot be lost sight of that modern day scientific and technological developments may tend to blur the specific human element in an otherwise fully automated process by which such services may be provided. The search for a more effective basis, therefore, must be made. 8. A reading of the very elaborate order of the Assessing Officer containing a lengthy discourse on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the expression technical services appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered or available which would not be covered by the aforesaid provision of the Act. 7. Following the above binding precedent, we hold that no TDS is required to be made on the payment towards leased line/data link charges. Therefore, the order of NFAC is hereby reversed. The grounds of appeal raised by the assessee stands allowed. 8. In the result, the appeal filed by the assessee is allowed. ITA No. 1456/PUN/2023 A.Y. 2017-18 : 9. The facts stated in ITA No. 1455/PUN/2023 are identical even in appeal bearing ITA No. 1456/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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