DCIT(TDS) 1(3), MUMBAI V. LARSEN & TOUBRO LTD ( E & C DIVISION), MUMBAI

ITA 3929/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0234 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 05-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 24-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN LD
• Assessee Lawyers: GOVIND JHAVERI LD ARS
• Keywords: Retrospective amendment; Non-deduction of tax
• Section: 201(1)

Judgement Text

ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI . , , BEFORE SHRI C.N. PRASAD, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3929/MUM/2015 ( / ASSESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME TAX (TDS)-1(3) ROOM NO. 703,7 TH FLOOR SMT. K.G.MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD MUMBAI 400 002 / VS. LARSEN & TOUBRO LIMITE D (E & C DIVISION) L & T HOUSE, N.M MARG, BALLARD ESTATE MUMBAI 400 001 PAN/GIR NO. A AAC L - 0140 - P TAN NO.MUML - 03180 - C ( '# /APPELLANT ) : ( $'# / RESPONDENT ) & ./I.T.A. NO.3947/MUM/2015 ( / ASSESSMENT YEAR: 2012-13) LA RSEN & TOUBRO LIMITED (E & C DIVISION) L & T HOUSE, N.M MARG, BALLARD ESTATE MUMBAI 400 001 / VS. DEPUTY COMMISSIONER OF INCOME TAX (TDS) 2(1) 7 TH FLOOR SMT. K.G.MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI 400 002 PAN/GIR NO. A AACL - 0140 - P T AN NO.MUML - 03180 - C ( '# /APPELLANT ) : ( $'# / RESPONDENT ) 2 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 & ./I.T.A. NO.3945/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) LARSEN & TOUBRO LIMITED (PAC DIVISION) L & T HOUSE, N.M MARG, BALLARD ESTATE MUMBAI 400 001 / VS. DEPUTY COMMISSIONER OF INCOME TAX (TDS) 2(1) 7 TH FLOOR SMT. K.G.MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI 400 002 PAN/GIR NO. A AACL - 0140 - P TAN NO.MUML - 0 0 051 - C ( '# /APPELLANT ) : ( $'# / RESPONDENT ) & ./I.T.A. NO.3946/MUM/2015 ( / ASSESSMENT YEAR: 2012-13) LARSEN & TOUBRO LIMITED (PAC DIVISION) L & T HOUSE, N.M MARG, BALLARD ESTATE MUMBAI 400 001 / VS. DEPUTY COMMISSIONER OF INCOME TAX (TDS) 2(1) 7 TH FLOOR SMT. K.G.MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI 400 002 PAN/GIR NO. A AACL - 0140 - P TAN NO.MUML - 0 0 051 - C ( '# /APPELLANT ) : ( $'# / RESPONDENT ) ASSESSEE BY : VIJAY MEHTA & GOVIND JHAVERI, LD. ARS REVENUE BY : M.C. OMI NINGSHEN, LD. DR / DATE OF HEARING : 05/06/2017 / DATE OF PRONOUNCEMENT : 28 /06/2017 3 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THESE ARE SET OF FOUR APPEALS-THREE BY THE ASSES SEE AND ONE BY THE REVENUE. SINCE THE SAME ARISES OUT OF COMMON SETS O F FACTS, WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE O F CONVENIENCE AND BREVITY. THE ISSUE INVOLVED IN ALL THE APPEAL IS LI ABILITY OF THE ASSESSEE TO DEDUCT TDS UNDER DIFFERENT PROVISIONS OF THE INCOME TAX ACT, 1961. FIRST, WE TAKE UP ASSESSEES APPEAL ITA NO. 3947/MUM/2015 AND REVENUES APPEAL ITA NO. 3929/MUM/2015, BEING CROSS APPEALS F OR ASSESSMENT YEAR [AY] 2012-13. 2 . BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT CORPORATE ASSESSEE AND DIVERSIFIED ENGINEERING COMPANY HOLDING TAN-MUML-03180-C, WAS TREATED AS ASSESSEE-IN-DEFAULT U/S 201(1) READ WITH SECTION 201(1A) OF THE INCOME TAX ACT, 1961 VIDE ASSESSING OFFICER [AO] ORDER DAT ED 21/03/2014. THE ASSESSEE WAS SUBJECTED TO A SURVEY ACTION ON 12/01/ 2012 WHEREIN CERTAIN DISCREPANCIES WERE NOTED WITH RESPECT TO COMPLIANCE OF TDS PROVISIONS AGAINST WHICH THE ASSESSEE WAS SADDLED WITH FOLLOWI NG DEMANDS, WHICH ARE THE SUBJECT MATTER OF PRESENT APPEALS:- 4 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 3.1 FACTS QUA BANK GUARANTEE CHARGES ARE THAT DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE PAID BA NK GUARANTEE CHARGES TO CERTAIN INDIAN & FOREIGN BANKS. THE ASSESSEE EXP LAINED THAT BANK GUARANTEE CHARGES WERE IN THE NATURE OF INTEREST U/ S 2(28A) AND THE PAYMENTS BEING MADE TO BANKS, NO TDS WAS REQUIRED T HEREUPON AS PER SECTION 194A(3). EVEN OTHERWISE, THE SAID PAYMENT, BEING ON PRINCIPAL TO PRINCIPAL BASIS, WAS NOT COVERED IN THE AMBIT OF COMMISSION / BROKERAGE U/S 194H AS PER THE DECISION OF MUMBAI TRIBUNAL REN DERED IN KOTAK SECURITIES LIMITED VS. DCIT [73 DTR 265 DATED 03/02/2012] . HOWEVER, NOT CONVINCED, THE LD. AO OPINED THAT THE SAME WAS IN T HE NATURE OF COMMISSION / BROKERAGE AS PER EXPLANATION (I) TO SECTION 194H AND THEREFORE, TDS WAS REQUIRED THEREUPON AND MOREOVER, THE DEPARTMENT HAD AGITATED THE CITED DECISION OF THE TRIBUNAL BEFORE HONBLE BOMBAY HIGH COURT WHICH WAS PENDING. 3.2 AGGRIEVED THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATED 13/04 /2015 WHERE THE LD. CIT(A) DELETED THE IMPUGNED DEMAND BY FOLLOWING TRI BUNALS DECISION NO. DESCRIPTION AMOUNT (RS.) RATE AT WHICH TDS OUGHT TO HAVE BEEN DEDUCTED AMOUNT OF TDS TO BE DEDUCTED (RS.) TDS MADE (RS.) SHORT DEDUCTION/DEM AND U/S 201 (RS.) INTEREST DEMAND U/S 201(1A) (RS.) 1. BANK GUARANTEE CHARGES 8,33,59,262/- 10% 83,35,926/- NIL 83,35,926/- 25,84 ,137/- 2. INTERNET CHARGES 15,96,662/- 10% 1,59,662/- NIL 1,59,662/- 49,494/- 84,95,588/ - NIL 84,95,588/ - 26,33,631/ - 5 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 RENDERED IN KOTAK SECURITIES LIMITED VS. DCIT [SUPRA]. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 3.3 THE LD. DEPARTMENTAL REPRESENTATIVE [DR] CONTES TED THE STAND OF LD. CIT(A) ON THE GROUND THAT THE CITED TRIBUNAL DECISI ON WAS ALREADY PENDING FOR ADJUDICATION BEFORE HONBLE BOMBAY HIGH COURT A ND THEREFORE, THE SAME HAS NOT ATTAINED FINALITY. FURTHER, THE NATURE OF T HE PAYMENT WAS COMMISSION AND HENCE, COVERED WITHIN THE AMBIT OF COMMISSION AND BROKERAGE AS PER EXPLANATION (I) TO SECTION 194H. 3.4 PER CONTRA, THE LD. COUNSEL FOR ASSESSEE [AR] PLACED RELIANCE O N THE CITED DECISION OF TRIBUNAL AND ALSO DREW OUR ATTENT ION TO THE FACT THAT THE SIMILAR ISSUE IN EARLIER YEARS STOOD DECIDED IN ASS ESSEES FAVOR BY THE TRIBUNAL, THE COPIES OF WHICH HAS BEEN PLACED BEFOR E US. 3.5 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS A ND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING CITED CASE LAWS. IT IS OBSERVED THAT THE ASSESSEE HAS PAID AGGREGATE SUM OF RS.833.59 LACS O UT OF WHICH RS.371.25 LACS HAVE BEEN PAID TO DOMESTIC BANK AND RS.462.33 LACS HAVE BEEN PAID TO THE FOREIGN BANK. SO FAR AS THE PAYMEN T TO DOMESTIC BANK IS CONCERNED, THERE IS NO QUARREL THAT THE ISSUE STOOD SQUARELY COVERED IN ASSESSEES FAVOR BY THE DECISION OF THIS TRIBUNAL R ENDERED IN KOTAK SECURITIES LIMITED VS. DCIT [SUPRA] WHERE THE TRIBUNAL HELD THAT SINCE THE PAYMENT WERE ON PRINCIPAL TO PRINCIPAL BASIS, THE SAME WAS NOT COVERED WITHIN THE MEANING OF COMMISSION AND BROKERAGE U/S 194H. THE SAME VIEW IS FORTIFIED BY CBDT NOTIFICATION NO. 56/2012 DATED 31/12/2012 WHICH CLEARLY 6 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 SAYS THAT NO TDS IS REQUIRED AGAINST BANK GUARANTEE COMMISSION PAID TO BANK LISTED IN THE SECOND SCHEDULE TO RBI ACT, 1934 . HOWEVER, FOREIGN BANK IS EXCLUDED FROM THE SCOPE OF SAID CIRCULAR. THEREF ORE, AT THE OUTSET, WE ARE INCLINED TO HOLD THAT THERE WAS NO REQUIREMENT TO D EDUCT TDS ON BANK GUARANTEE COMMISSION OF RS.371.25 LACS PAID BY ASSE SSEE TO DOMESTIC BANK. 3.6 HOWEVER, AS ALREADY STATED, IT IS NOTED THAT TH E CBDT CIRCULAR DO NOT COVER PAYMENT TO FOREIGN BANKS AND FURTHER, THE PRO VISIONS OF SECTION 194H APPLY ONLY TO PAYMENT MADE TO RESIDENTS. THE LOWER AUTHORITIES HAVE FAILED TO EXAMINE THE ISSUE FROM CORRECT PERSPECTIVE BY AP PRECIATING THE RELEVANT FACTS, STATUTORY PROVISIONS, TREATY PROVISIONS, REL ATIONSHIP BETWEEN PARTIES, NATURE OF SERVICES AVAILED / PAYMENT MADE ETC. SINC E THE AY INVOLVED IS 2012-13 AND THEREFORE, AT THIS STAGE, WE ARE NOT IN CLINED TO AFFORD ANOTHER OPPORTUNITY TO REVENUE TO IMPROVE UPON THEIR CASE. CONSEQUENTLY, THE IMPUGNED PAYMENTS, BEING NOT COVERED WITHIN THE AMB IT OF SECTION 194H, THE RESULTANT DEMAND RAISED AGAINST THE SAME FOR NO N-DEDUCTION OF TDS DOES NOT SURVIVE. 3.7 RESULTANTLY, GROUND NO.1 OF REVENUES APPEAL ST ANDS DISMISSED, GROUND NO. 2 IS RELATED WITH CONSEQUENTIAL INTEREST U/S 201(1A). SINCE, GROUND NO. 1 HAS BEEN DISMISSED, CONSEQUENTIAL INTE REST DOES NOT SURVIVE WHICH LEAD TO DISMISSAL OF GROUND NO. 2 AS WELL. TH E REVENUES APPEAL STANDS DISMISSED. 7 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 4. THE ISSUE IN ASSESSEES APPEAL IS REGARDING TDS ON INTERNET CHARGES / DATA CARD EXPENSES. THE ASSESSEE DEBITED INTERNET C HARGES OF RS.62,20,232/-, WHICH, INTER-ALIA, COMPRISED OF FOLLOWING COMPONENTS:- THE OTHER PAYMENT OF RS.15,96,662/- HAVE BEEN PAID AS PER THE FOLLOW ING DETAILS:- THE ISSUE IN PRESENT APPEAL IS RELATED WITH OTHER PAYMENT OF RS.15,96,662/- ON WHICH NO TDS HAS BEEN DEDUCTED. 4.1 DURING QUANTUM ASSESSMENT, THE ASSESSEE EXPLAIN ED THAT OTHER PAYMENT CONSTITUTED PAYMENT TOWARDS USAGE OF STANDA RD INTERNET CONNECTIVITY PROVIDED BY SERVICE PROVIDER AND HENCE , DID NOT FALL WITHIN THE MEANING OF TECHNICAL / CONSULTANCY / MANAGERIAL SERVICES SO AS TO ATTRACT TDS PROVISIONS AND THE SAME WAS MERE USAGE OF STAND ARD FACILITY FOR A FEE. RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE MADR AS HIGH COURT RENDERED IN SKYCELL COMMUNICATIONS LTD. VS DCIT 251 ITR 53. HOWEVER, NOT CONVINCED, LD. AO OPINED THAT THE SAID EXPENDIT URE RESULTED INTO UP NO. PARTICULARS AMT. (RS.) 1. MARK-UP CHARGED BY THE VENDOR-TDS DEDUCTED 2,33, 325/- 2. REIMBURSEMENT TO VARIOUS OTHER UNITS OF THE ASSE SSEE OUTSIDE INDIA 5,76,720/- 3. REIMBURSEMENT OF EXPENSES OF UNITS OF L&T AND DA TA CARD EXPENSES 38,13,525/- 4. OTHER PAYMENT-NO TDS DEDUCTED 15,96,662/- TOTAL 62,20,232/ - NO. NAME OF THE PAYEE AMT. (RS.) 1. VERIZONE COMMUNICATION INDIA-FOR INTERNET USAGE 15,32,109/- 2. RELIANCE COMMUNICATIONS-FOR DATA CARD EXPENSES 3 3,662/- 3. TATA TELESERVICES LTD-FOR DATA CARD EXPENSES 30, 891/- TOTAL 15,96,662/ - 8 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 GRADATION OF SKILLS OF THE BUSINESS AS WELL AS EMPL OYEES AND UP GRADATION OF TECHNOLOGY HAS RESULTED INTO TECHNICAL SERVICES BEI NG AVAILABLE AT THE DESKTOP AND HENCE COVERED WITHIN THE MEANING OF TECHNICAL SERVICES AS DEFINED IN EXPLANATION (2) TO SECTION 9(1)(VII). TH E LD. AO FURTHER OPINED THAT THE SAME ALSO CONSTITUTED ROYALTY WITHIN THE MEANING OF EXPLANATION 2(IVA) AND 2(VI) OF SECTION 9(1)(VI). RELIANCE WAS PLACED ON THE JUDGMENT OF THIS TRIBUNAL RENDERED IN ACIT VS SANSKAR INFO T.V.P. LTD. [2008 24 SOT 87] WHERE IT WAS HELD THAT SERVICE FEES FOR USE OF TRA NSPONDER AND UP LINKING FACILITY IN A SATELLITE IS COVERED UNDER THE PROVIS IONS OF SECTION 9(1)(VI). WITH THESE OBSERVATIONS, IMPUGNED DEMAND AGAINST PAYMENT SO MADE FOR RS.15,96,662/- WAS RAISED AGAINST THE ASSESSEE FOR NON-DEDUCTION OF TAX U/S 194J. 4.2 AGGRIEVED, THE ASSESSEE ASSAILED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 13/04/2 015 WHERE THE ASSESSEE REITERATED THAT THE IMPUGNED PAYMENTS WERE TOWARDS USE OF STANDARD INTERNET FACILITY. IT WAS FURTHER EXPLAINE D THAT REIMBURSEMENT OF DATA CARD EXPENSES TO EMPLOYEES WAS AKIN TO TELEPHO NE EXPENSES ONLY AND THEREFORE, NO TDS WAS REQUIRED AGAINST THE SAME. TH E LD. CIT(A) AFTER APPRECIATING THE PROVISIONS OF SECTION 194J AND RET ROSPECTIVE AMENDMENT MADE IN THE DEFINITION OF ROYALTY MADE BY FINANCE ACT, 2012 AND IN PARTICULAR THE MEANING OF PROCESS AS PER EXPLANATION 6 TO 9(1)(VI) AND THE JUDGMENT OF HONBLE MADRAS HIGH COURT RENDERED IN VERIZONE COMMUNICATIONS SINGAPORE PVT LTD [ITA NO. 149 OF 20 11 AND 230 OF 2012 9 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 ORDER DATE 19/11/2013] CONCLUDED THAT, PROCESS INCLUDED INTERNET CHARGES AND HENCE ROYALTY REQUIRING TDS U/S 194J. RELIANCE PLACED BY THE ASSESSEE ON THE DECISION OF THIS TRIBUNAL IN CHANNEL GUIDE INDIA LTD. VS ACIT WAS DISTINGUISHED. THE LD. CIT(A), WHILE OBSERVING SO, FURTHER HELD THAT THE SAID PAYMENT, BEING RENT IN NATURE, REQUIRED DEDUCTION O F TDS U/S 194I ALSO ON ACCOUNT OF USAGE OF EQUIPMENT. 4.3 THE LD. CIT(A) FURTHER NOTED THAT SINCE THE ASS ESSEE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT REIMBURSEMENT OF DATA CARD EXPENSES WERE MERE REIMBURSEMENT WITHOUT THEIR BEING ANY ELE MENT OF INCOME EMBEDDED IN THE SAID PAYMENT AND HENCE LIABLE FOR T DS. AGGRIEVED, THE ASSESSEE IN APPEAL BEFORE US. 5. THE ASSESSEE HAS RAISED FIVE GROUNDS OF APPEALS OUT OF WHICH GROUND NO. 5 IS GENERAL IN NATURE. GROUND NO. 4 IS RELATED WITH CHARGING OF INTEREST U/S 201(1A). THE SAME BEING MANDATORY AND CONSEQUEN TIAL IN NATURE AND HENCE DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. GROUND NO. 1 & 2 IS RELATED WITH TDS ON INTERNET / COMMUNICATION CHARGE S WHEREAS GROUND NO. 3 IS RELATED WITH DATA CARD EXPENSES REIMBURSED TO THE EMPLOYEES. 5.1 THE LD. COUNSEL FOR ASSESSEE [AR] WHILE DRAWING OUR ATTENTION TO THE PAPER BOOK REITERATED THE SAID CONTENTIONS BY STATING THAT THE ASSESSEE AVAILED MERE STANDARD INTERNET CONNECTIVITY FROM TH E SERVICE PROVIDER AND PAID THE SAID CHARGES AND HENCE NO TDS WAS REQUIRED TO BE DEDUCTED IN TERMS OF VARIOUS JUDICIAL PRONOUNCEMENTS. FURTHER, THE LD. CIT(A) CONFIRMED THE DEMAND BY APPLYING THE RETROSPECTIVE AMENDMENT MADE BY FINANCE 10 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 ACT, 2012 WHEREAS THE ASSESSEE, AT THE RELEVANT POI NT OF TIME, WAS NOT REQUIRED TO DEDUCT TDS AND THEREFORE, COULD NOT BE EXPECTED TO PERFORM AN IMPOSSIBLE TASK OF DEDUCTING TDS FROM THE IMPUGNED PAYMENTS. REGARDING DATA CARD EXPENSES, IT WAS CONTENDED THAT THE DEMAN D HAS BEEN CONFIRMED MERELY ON THE SUSPICION THAT THE SAME INVOLVED PROF IT ELEMENT AND HENCE REQUIRED TDS WITHOUT CALLING FOR ANY INFORMATION FR OM THE ASSESSEE WHEREAS THE SAME, IN FACT, WERE MERE REIMBURSEMENT REQUIRIN G NO DEDUCTION AT ALL. 5.2 PER CONTRA, LD. DR PLACED RELIANCE ON THE FINDINGS OF THE LD. C IT(A) AND CONTENDED THAT THE SAME CONSTITUTED FEES FOR TECHNICAL SERVICES AS WELL AS ROYALTY AS USE OF SATELLITE WAS MADE TO AVAIL THE SAID SER VICES. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS. SO FAR AS GROUND NO. 3, IS CONCERNED, SINCE THE ASSESSEE HAS CONTENDED THAT TH E DATA CARD EXPENSES IS AKIN TO TELEPHONE EXPENSES AND MERE REIMBURSEMEN T OF DATA CARD EXPENSES TO EMPLOYEES, WE RESTORE THE MATTER BACK T O THE FILE OF AO FOR THE PURPOSE OF VERIFICATION OF THE SAID CONTENTION AND DECIDE ACCORDINGLY AS PER LAW. NEEDLESS TO SAY, ANY REIMBURSEMENT OF MERE DAT A CARD EXPENSES TO EMPLOYEES, WHICH ARE PRIMARILY IN THE NATURE OF TEL EPHONE EXPENSES DO NOT FALL WITHIN THE MEANING OF FEES FOR TECHNICAL SERVICES OR ROYALTY . 5.4 REGARDING, INTERNET CHARGES, WE FIND THAT THE L OWER AUTHORITIES HAVE FAILED TO APPRECIATE THE TRUE NATURE OF SERVICES BE ING AVAILED BY THE ASSESSEE. THE ASSESSEE HAS CONTENDED THAT THE SAME ARE PAYMENT TOWARDS USAGE OF STANDARD INTERNET FACILITY OBTAINE D FROM THE SERVICE PROVIDER WHEREAS THE LD. AO OPINES THAT THE SAME AR E IN THE NATURE OF 11 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 FEES FOR TECHNICAL SERVICES AS WELL AS ROYALTY . THE LD. CIT(A) WENT A STEP FURTHER IN NOTING THAT THE SAID EXPENDITURE WA S NOT ONLY FEES FOR TECHNICAL SERVICES BUT ALSO COVERED U/S 194I BEING IN THE NATURE OF R ENT FOR USAGE OF EQUIPMENT. A PERUSAL OF THE SAMPLE INVOICE PLACED IN THE PAPER BOOK, PRIMA FACIE, REVEALS THAT THE SAID EXPENDITURE IS TOWARDS INTERNET SERVICES & INTERNET DEDICATED LINE. THEREFORE, THIS BEING THE CASE, THE NATURE OF SERVICES BEING AVAILED BY THE ASSESSEE RE QUIRES RE-APPRECIATION BY LOWER AUTHORITIES AND HENCE, THE MATTER IS REMIT TED BACK TO THE FILE OF LD. AO TO RE-EXAMINE THE NATURE OF SERVICES AND THEREAF TER, DETERMINE THE TRUE CHARACTER OF THE SAME I.E. WHETHER FEES FOR TECHNIC AL SERVICES / ROYALTY / RENT OR PAYMENT TOWARDS USAGE OF STANDARD INTERNET FACIL ITY AND IN PARTICULAR, THE FOLLOWING OBSERVATION OF APEX COURT REGARDING FEES FOR TECHNICAL SERVICES MADE IN CIT VS . KOTAK SECURITIES LTD. [2016 383 ITR 1]:- 6. WHAT MEANING SHOULD BE ASCRIBED TO THE WORD 'TECHNI CAL SERVICES' APPEARING IN EXPLANATION 2 TO CLAUSE (VII) TO SECTION 9(1) OF TH E ACT IS THE MOOT QUESTION. IN CIT V. BHARTI CELLULAR LTD. [2011] 330 ITR 239/[2010] 193 TAXMAN 97 THIS COURT HAS OBSERVED AS FOLLOWS: 'RIGHT FROM 1979, VARIOUS JUDGMENTS OF THE HIGH COU RTS AND TRIBUNALS HAVE TAKEN THE VIEW THAT THE WORDS 'TECHNICAL SERVICES' HAVE GOT T O BE READ IN THE NARROWER SENSE BY APPLYING THE RULE OF NOSCITUR A SOCIIS, PARTICULARL Y, BECAUSE THE WORDS 'TECHNICAL SERVICES' IN SECTION 9(1)(VII), READ WITH EXPLANATI ON 2 COMES IN BETWEEN THE WORDS 'MANAGERIAL AND CONSULTANCY SERVICES'.' 7. 'MANAGERIAL AND CONSULTANCY SERVICES' AND, THEREFOR E, 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 BH ARTI CELLULAR LTD'S. CASE (SUPRA). HOWEVER, IT CANNOT BE LOST SIGHT OF THAT MODERN DAY SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENTS MAY TEND TO BLUR THE SPECIFIC HUMAN EL EMENT IN AN OTHERWISE FULLY AUTOMATED PROCESS BY WHICH SUCH SERVICES MAY BE PRO VIDED. THE SEARCH FOR A MORE EFFECTIVE BASIS, THEREFORE, MUST BE MADE. 12 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 8. A READING OF THE VERY ELABORATE ORDER OF THE ASSESS ING OFFICER CONTAINING A LENGTHY DISCOURSE ON THE SERVICES MADE AVAILABLE BY THE STO CK EXCHANGE WOULD GO TO SHOW THAT APART FROM FACILITIES OF A FACELESS SCREEN BASED TR ANSACTION, A CONSTANT UPGRADATION OF THE SERVICES MADE AVAILABLE AND SURVEILLANCE OF THE ESS ENTIAL PARAMETERS CONNECTED WITH THE TRADE INCLUDING THOSE OF A PARTICULAR/SINGLE TRANSA CTION THAT WOULD LEAD CREDENCE TO ITS AUTHENTICITY IS PROVIDED FOR BY THE STOCK EXCHANGE. ALL SUCH SERVICES, FULLY AUTOMATED, ARE AVAILABLE TO ALL MEMBERS OF THE STOCK EXCHANGE IN R ESPECT OF EVERY TRANSACTION THAT IS ENTERED INTO. THERE IS NOTHING SPECIAL, EXCLUSIVE O R CUSTOMISED SERVICE THAT IS RENDERED BY THE STOCK EXCHANGE. 'TECHNICAL SERVICES' LIKE 'MANA GERIAL AND CONSULTANCY SERVICE' WOULD DENOTE SEEKING OF SERVICES TO CATER TO THE SP ECIAL NEEDS OF THE CONSUMER/USER AS MAY BE FELT NECESSARY AND THE MAKING OF THE SAME AV AILABLE BY THE SERVICE PROVIDER. IT IS THE ABOVE FEATURE THAT WOULD DISTINGUISH/IDENTIFY A SERVICE PROVIDED FROM A FACILITY OFFERED. WHILE THE FORMER IS SPECIAL AND EXCLUSIVE TO THE SE EKER OF THE SERVICE, THE LATTER, EVEN IF TERMED AS A SERVICE, IS AVAILABLE TO ALL AND WOULD THEREFORE STAND OUT IN DISTINCTION TO THE FORMER. THE SERVICE PROVIDED BY THE STOCK EXCHANGE FOR WHICH TRANSACTION CHARGES ARE PAID FAILS TO SATISFY THE AFORESAID TEST OF SPECIAL IZED, EXCLUSIVE AND INDIVIDUAL REQUIREMENT OF THE USER OR CONSUMER WHO MAY APPROACH THE SERVIC E PROVIDER FOR SUCH ASSISTANCE/SERVICE. IT IS ONLY SERVICE OF THE ABOVE KIND THAT, ACCORDING TO US, SHOULD COME WITHIN THE AMBIT OF THE EXPRESSION 'TECHNICAL SERVI CES' 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 F ACILITY OFFERED OR AVAILABLE WHICH WOULD NOT BE COVERED BY THE AFORESAID PROVISION OF THE AC T. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY AL LOWED FOR STATISTICAL PURPOSES. 6. NOW, WE TAKE UP ASSESSEES APPEAL ITA NO. 3945/M UM/2015 FOR AY 2011-12 AND ITA NO. 3946/MUM/2015 FOR AY 2012-13 WH ICH ASSAILS THE COMMON ORDER OF LD. CIT(A) ORDER DATED 13/04/2015 QUA CONFIRMATION TO SIMILAR TDS DEMAND AGAINST INTERNET / COMMUNICATION CHARGES. THE ASSESSEE HAS RAISED SIMILAR GROUNDS IN BOTH THE APP EALS AND THE FACTS ARE ALSO IDENTICAL WITH ITA NO.3947/MUM/2015, WHICH WE HAVE ALREADY DECIDED. THEREFORE, TAKING THE SAME STAND, GROUND NO. 1,2 & 3 IS RESTORED BACK TO THE FILE OF LD. AO FOR FURTHER APPRECIATION / VERIF ICATION ON SIMILAR LINES WHEREAS GROUND NO.4 IS RELATED WITH CONSEQUENTIAL I NTEREST AND HENCE DO 13 ITA NOS. 3929,3945 TO 3947/MUM/2015 LARSEN & TOUBRO LIMITED ASSESSMENT YEARS- 2011-12 & 2012-13 NOT REQUIRE ANY INTERFERENCE ON OUR PART. RESULTANT LY, BOTH THE APPEALS STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN NUTSHELL, REVENUES APPEAL STANDS DISMISSED W HEREAS ALL THE APPEALS OF THE ASSESSEE STANDS PARTLY ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE, 2017. SD/- SD/- (C. N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 28.06.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $'# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. &- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI