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2013 (1) TMI 421 - ITAT BANGALOREIndia-USA DTAA - non deduction of TDS on payments/remittances - proceedings under section 201(1) - assessee contested that the services rendered were not in the nature of royalty as contemplated in the provisions of section 9(1)(vi) also not in relation to development or transfer of any technical plan or technical design or Technical Services - Held that:- From a perusal of the order of assessment, it is found that all the submissions of the assessee before the AO and his findings thereon are only in respect of whether the payment made by the assessee to the consultant M/s. IBM Corporation, USA was or was not taxable in India as royalty under Article 12(3) of the India-USA, DTAA or as Fees for included services under Article 12(4) of the India-USA, DTAA. There was no submission by the assessee or examination by the AO as to whether or not the payment made to the consultant M/s. IBM Corporation, USA for services rendered to the assessee pursuant to their agreement dt.20.3.2006 are not in the nature of royalty as contemplated by the provisions of section 9(1)(vii) is exigible to tax in India as per domestic law thereby attracting the provisions of TDs under section 195. In this factual matrix, the fundamental issue of whether the said payments to M/s. IBM corporation, USA by the assessee for services rendered are in the nature of royalty as per the provisions of section 9(1)(vii) and exigible to tax there under in India requires to be examined and therefore remit the same issue to the file of the AO for examination and finding thereon after affording the assessee adequate opportunity of being heard in the matter - in favour of assessee for statistical purposes.
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