2. Interconnection / port charges not liable u/s 194J: Expression ‘Fees for technical services’ as appearing in section 194J would have reference to only technical service rendered by a human. It would not include any service provided by machines or robots. Hence, interconnect charges / port access charges cannot be regarded as fees for technical services. CIT Vs Bharati Cellular Ltd 175 Taxman 573 (Del.)
3. TDS liability only if income is taxable [Section 195]: TDS obligation arises only if the tax is assessable in India. If the interest is exempt under the Act, there was no question of TDS being deducted by the assessee. Vijay Ship Breaking Corpn Vs CIT 175 Taxman 77 (SC)
4. Liability to deduct tax u/s 195: Payment of interest presupposes the borrowal of money or the incurring of a debt. Issuance of debentures is a mode of borrowing money. If the mode of discharging the debenture debt us by issuing equity shares in lieu of cash, it does not in any way detract from its legal character as a debt. The assessee is liable to deduct tax in respect of the interest payments. LMN India Ltd 307 ITR 40 (AAR)
Source: Padhuka