Roaming Charges paid by Vodafone India to Other Telecom Operators Not subject to TDS u/s 194C or 194J of Income Tax Act: ITAT [Read Order]

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently held that roaming charges paid by Vodafone India to other telecom operators are not subject to Tax Deduction at Source (TDS) under section 194C or 194J of Income Tax Act, 1961.

Assessee-Vodafone India Ltd. filed the appeal against the order of Commissioner of Income Tax (Appeals). The reason for filing the appeal was that the  Assessing Officer made disallowance under Section 40(a)(ia) of the Income Tax Act on the pretext that the provisions of section 194C and/ or section 194J  of the Income Tax Act are attracted on payments made to other telecom operators.

Salil Kapoor, Counsel for the assessee submitted that during the year under consideration the assessee incurred expenses on roaming charges. Payments are made to other telecom operators to enable subscribers of the assessee to make or receive calls originating / terminating on other telephone networks

Further the Roaming service is in the nature of automated services and no human intervention for switching over to the network of other telecom operators while in roaming is warranted.

Anand Mohan, Counsel for the revenue supported the contentions of the lower authorities.

The Co-ordinate Bench, after analyzing the facts of the case and various decisions held that the payment of roaming charges did  not fall under the ambit of TDS provision either under Section  194C or 194J of the Income Tax Act. Hence, the addition made under Section  40(a)(ia) of the Income Tax Act was deleted.

Therefore the bench of Vikas Awasthy, (Judicial Member) and M. Balaganesh, (Accountant Member) allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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Vodafone India Ltd vs Additional Commissioner of Income Tax , 2023 TAXSCAN (ITAT) 716 , Shri Salil Kapoor,Shri Vibhu Jain ,Ninad Patade , Shri Anand Mohan