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7.1 We after hearing both the parties find that the assessee in this case is basically making three types of payments to M/s. BSNL which are as under:

(i) Lease Line rental charges
(ii) Port charges
(iii) Access charges These nature of services rendered by M/s. BSNL is explained in the following manner which has been placed on record by the assessee and is being reproduced for the facility of reference:
When a call generates from a Hutch subscriber, the signals are first encountered at the Base Transceiver Station ('BTS') and the Base Station Controller ("BSC) (commonly known as cell sites). Both BTS and BSC belong to Hutch. From BSC, the call travels to Mobile Switching Center where the routing and changing of the calls take place. Till this stage the signal travels on a wireless system. From the Mobile Switching Center (MSC), depending upon the route where the call is destined, it is carried through electrical medium to the TX system of Hutch. From this stage onwards the call travels through Optical Fibre Cables ('OFC') to the TX system of BSNL from where it is routed to the relevant BSNL Exchange. The charges for the use of the leased line between the TX system of Hutch and the TX system of BSNL and also between the TX system of BSNL and the Exchange are referred to as 'Annual Rent and Guarantee, Rental and/or leased line charges' (shown under the head 'PSTN Interconnect fees' in our Books of Account) which are variable upon the number of PCMs that are blocked (PCMs means Pulse code modulation). The Port charges and the inter junction charges are variable depending upon the number of PCMs and the junction distance. However, these charges, once determined, are fixed irrespective of the number of calls actually made. Pass through charges, on the other hand, are the charges levied for accessing the system depending upon the number of calls made. In other words, the Pass Through Charges are the charges fixed based on the number of actual calls made. Pass Through Charges for a STD/ISD call are also paid to other telecom operators {viz- VSNL, Data Access etc.).