2015 (2) TMI 730 - SUPREME COURT

TDS u/s 194J - Nature of an amount term as “success fee” paid to Non Resident Company (NRC) at the rate of 0.75% of the total debt financing - consultancy service or not - whether chargeable under the provisions the Act? - Entitlement to ‘No Objection Certificate’ by assessee - HC opined that the business connection between the petitioner company and the NRC had not been established - Held that:- As the factual matrix in the case at hand, would exposit the NRC had acted as a consultant. It had the skill, acumen and knowledge in the specialized field i.e. preparation of a scheme for required finances and to tie-up required loans. The nature of activities undertaken by the NRC can be said with certainty would come within the ambit and sweep of the term ‘consultancy service’ and, therefore, it has been rightly held that the tax at source should have been deducted as the amount paid as fee could be taxable under the head ‘fee for technical service’. Once the tax is payable paid the grant of ‘No Objection Certificate’ was not legally permissible. Ergo, the judgment and order passed by the High Court are absolutely impregnable. - Decided against assessee.