No technical skill was required to render services for transmission of bulk SMS data, thus, payments for said services could not be regarded as 'fee for technical services'.
a) The assessee had made carrier payments to Clickatel (‘NR Company’) for transmission of bulk SMS data without withholding any taxes.
b) The Assessing Officer disallowed such payments by invoking provisions of section 40(a)(i). On appeal, the CIT(A) deleted such disallowance. The aggrieved-revenue filed the instant appeal.
The Tribunal held in favour of assessee as under:
1) The nature of services rendered by NR Company was only for transmission of bulk SMS data. No technical skill was required for transmission of such data;
2) The CIT(A) had rightly held that carrier was a medium for sending bulk SMS and, thus, it could not be considered as technical services.
3) Since the payments made by assessee to NR Company were not 'fee for technical services,' they were not liable for taxation in India;
4) Thus, assessee was not required to deduct tax at source while making such payments. The CIT(A) was justified in deleting impugned disallowance.- Dy. CIT v. Velti India (P.) Ltd  43 taxmann.com 425 (Chennai - Trib.)