Case Law Details
Brief- ITAT Chennai has held in In the case of Dishnet Wireless Limited vs. DCIT that No liability of TDS will arise if the amount of expense or payee is not ascertainable though year-end provisions are made by the Appellant. ITAT further held that Roaming charges services are not technical services, not liable to TDS u/s 194J.
Brief Facts of the case:
The assessee had not deducted the TDS on the provisions made in the books of account on the site restoration expenses, as well as on the year end provisions, that it did not know the payee and the amount on which TDS to be deducted. Moreover it did not deduct the TDS on the roaming charges which it paid to the other companies because it did not consider the same to be a technical services liable to TDS u/s 194J which the AO disallowed the above expenses which was upheld by the CIT(A.
The assessee filed an appeal with ITAT who confirmed the appeal of assessee.
Facts of the case:
The assessee had booked the year end provision of the site restoration expenses and some other year end provisions without deducting and depositing the TDS on the same. Moreover it had also paid the roaming charges to the other cellular companies without deducting the TDS u/s 194J.
Contention of the case:
The assessee was of the view that the provision of site restoration charges and the year end provisions of other charges which it made was not identifiable due to which it did not deduct the TDS of the same .More over even the payee and the amount which it would be payable after the lease period of 20 years was not known so the question of deduction of TDS did not arise because if it would deduct the TDS then at the time of issuing of form 16 A whose name & PAN would be written on the same.
Assessee paid the roaming charges to the other cellular companies without deduction of TDS u/s 194J because the assessee considered the same to be non –technical service because when a person reaches outstation the roaming facility gets automatically activated with just few initial human intervention .There was not any human interface who was providing the service to the customers. the technical service could only be provided by the human so the above roaming charges were not technical charges so not liable to TDS u/s 194J.
Contention of the Revenue:
Revenue was of the view that the provision can only be created when the actual liability had taken place and the payment would be paid in the succeeding year so the provision of site restoration charges and year end provision liable for TDS and as the assessee had not deducted the TDS so assessee to be considered in assessee in default .
In the case of roaming charges, customer first had to make some settings to avail the benefit of roaming services so there was human intervention which were technical services and payment of technical services liable to TDS u/s 194J.
Held by Respective court:
Site Restoration expenses-ITAT held that the provision which the assessee made was not credited to any party’s or individual account so it did not disclose the person to whom payment to be made so not liable to TDS .Moreover it would not be able to issue form 16A to the payee as payee was not known.
Year end provisions: As the services like daily horoscope, songs, wallpapers download would be known to the assessee on the last day of the financial year ,so on these services TDS should be deducted and the other services like customer verification etc would not be known to the assessee so TDS liability did not arise .ITAT remanded back this issue to the AO to clearly differentiate between the services which were known and not known at the year end .
Roaming Charges –Once configuration had been made then no human intervention was required to receive any calls, any data .So there were not any technical services provided by the human interface so not liable to TDS.
