Vodafone Idea Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that the interconnect usage charges and roaming charges paid to Foreign Telecom Operators [FTOs] are not in the nature of royalty and hence not taxable in India. Thus, disallowance u/s. 40(a)(i) for non-deduction of TDS not justified. Accordingly, appeal allowed to that extent.
Facts- The assessee company is engaged in the business of providing cellular mobile service and trading of handsets and accessories. The assessee’s case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The learned Assessing Officer (‘ld. A.O.’ for short) had passed the assessment order u/s. 143(3) of the Act dated 27.03.2014, determining total income at Rs. 1078,68,58,040/- under the normal provisions and Rs. 851,75,07,903/- u/s. 115JB on the book profit after making some addition/disallowance.
CIT(A) vide order dated 22.01.2018 had partly allowed the appeal of the assessee by upholding certain additions/disallowance and deleting the remaining additions/disallowance made by the ld. AO. Thus, both the assessee as well as revenue are in cross appeals, challenging the impugned order on various grounds.
Conclusion- Held that the first proviso to Section 40(a)(ia) of the Act states that when tax has been deducted in any subsequent year or has been deducted during the previous year but has been paid after the due date specified in Sub Section (1) of Section 139 of the Act, then the same shall be allowed as deduction in computing the income of the previous years in which such tax has been paid. As the assessee claims that it had paid TDS u/s. 194H during the impugned year, we deem it fit to hold that this factual aspect has to be verified by the ld. AO and to allow the corresponding deduction as per the provisions and in accordance with law. We do not find any infirmity in the order of the ld. CIT(A) directing the ld. AO to verify this factual aspect. We therefore are inclined to remand this issue to the file of ld. AO for further verification.
