Amount paid for course study material by franchisee - not covered by section 194 J.

In Asstt.CIT v. Frontline Software Services (P) Ltd (2009) 24 DTR (Ind)(Trib) 232 the assessee a franchisee of NIIT paid amounts towards course study materials which were different and in addition to, fees paid for technical know-how. The issue in dispute was as regards its coverage under section 194J of the Act as ‘technical fee’. The Commissioner (Appeals) held that the payment towards course materials is not liable for tax deduction under section 194J. The tribunal held that section 9(1)(vii) covers any consideration paid for managerial, technical or consultancy services and it would not apply to payments made for purchase of course study materials. Accordingly it was held that the payment is not liable for tax deduction at source. Thus the decision was in favour of the assessee.