CA.Ramesh Baheti (Service) (74 Points)
09 March 2011
Payment to Sify Technology as fixed qtrly rental for usage of broadband.
Whether TDS provision would be applicable? if yes, under which Section?
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 10 March 2011
Madras High Court decision in the Skycell Communications Ltd v DCIT (2001 251 ITR 53 Madras) case which relates to cellular telephone services. The court in this case observed that in the modern day world almost every facet of one's life is linked to science and technology inasmuch as the things used and relied upon in everyday life or the result of scientific and technological development. Almost all instruments and gadgets used to make life easier are the result of scientific invention or development and involve the use of technology. The court also observed that the installation and operation of sophisticated equipment with a view to earn income by allowing customers to utilise the benefit of the user of such equipment does not result in the provision of technical service to the customer for a fee. The subscriber, in such a case, is not concerned about the complexity of the facility installed, but only wishes to use the telephone facility while subscribing for a cellular telephone. In fact, in this case, the court observed that Section 194J will not cover the charges paid by the average householder or consumer for utilising the products of modern technology such as telephone, fixed or mobile, cable TV, the Internet, the automobile, the rail, the aeroplane, consumption of electrical energy, and so on.
CA.Ramesh Baheti
(Service)
(74 Points)
Replied 11 March 2011
Thx Mr Sharma. But confusion is this whether, it is covered U/s 194 I (Rent P & M)
srinivasan
(service)
(898 Points)
Replied 11 March 2011
This cannot be covered under the rental as in the case of rent it is the exclusive right to use the plant and machinery which is received by the lessee. In the case of the usage of broadband no such exclusive right is given to the lessee. therefore TDS u/s 194I would not apply to this case.
CAclubindia
