While granting relief to Vodafone, the Chennai bench of Income Tax Appellate Tribunal (ITAT) recently held that roaming charges cannot be considered as fee for technical services, hence there is no need to deduct tax at source under Section 194J of the Income Tax Act.
Vodafone Cellular Limited is the assessee in the present case who engaged in the business of wireless telecommunication network. The main issue in this case is deduction of tax at source in respect of roaming charges.
Revenue filed an appeal before the tribunal bench by challenging that the provisions of Section 194J of the Income-tax Act, 1961 are applicable on roaming charges charged by the assessee.
The division bench comprising of Judicial Member N.R.S. Ganesan and Accountant Member S. Jayaraman has objected the findings of revenue. The bench held that provisions of section 194J of the act deals with any consideration for rendering services like managerial, technical, consultancy etc. but in this case the assessee made roaming charges only, it cannot be considered as fee for technical services.
The bench further said that both roaming charges and fee for technical services are different in nature. Hence provisions of section 194J of the Income Tax Act are not applicable in this case and also allowed the appeal filed by the assessee.
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