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2012 (6) TMI 516 - ITAT CHENNAIUnexpired value of Annual Maintenance Contracts - addition - Held that:- Undisputedly, said amount pertained to unexpired period of AMC falling outside the end of the relevant previous year. The clients of the assessee could at any point cancel the contract and get a refund for the unexpired period. This itself meant that the amount received by the assessee at the point of time it entered into an AMC was nothing but an advance, which on the progress of each day got converted into revenue. Therefore, following Principle of matching concept of income and expenses, assessee was justified in not recognizing revenue for the unexpired period of AMC - Decided in favor of assessee. DTAA between India and Mauritius - payment made to Mauritius company for conducting market survey for exploring Opportunities in Asia for Electronics - Revenue contended the same to be FTS and dis-allowed expenditure u/s 40(a)(ia) on account of non-deduction of tax at source - Held that:- Since, such a "market survey" definitely involved exercise of technical knowledge and skill by the persons, therefore, by virtue of Explanation 2 to Section 9(1)(vii), the type of service received was nothing but fees for technical services. However, Chapter III of DTAA between India and Mauritius did not provide for taxing any fees paid for technical services. Only for a reason that DTAA is silent on a particular type of income, such income will not automatically become business income of the recipient. Hence, when DTAA is silent on an aspect, the provisions of the Act has to be considered and applied. Therefore, matter remitted back to A.O. for consideration afresh.
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