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2018 (1) TMI 1537 - AT - Income TaxTDS u/s 195 - payments under the head “Consulting Services” to M/s. UST Global Inc., USA, a non-resident company incorporated in the United States of America, without deducting tax at source - HELD THAT:- The Authority for Advance Ruling considered the DTAA between India and UK and found that rendering of service and making use of service go together. It was found that rendering of service and making use of the service are two sides of the same coin. After considering the word “which” the Authority for Advance Ruling found that rendering technical or consultancy service is followed by relative pronoun “which” and it has the effect of qualifying the services. The service offered may be the product of intense technological effort and lot of technical knowledge and the experience of the service provider would have gone into it. Authority for Advance Ruling found that the technical knowledge and the experience of the service provider should be imparted to and absorbed by the receiver, so that the receiver can deploy similar technology or techniques in future without depending on the provider. In this case also, the information, expertise and training provided by the USA company was absorbed by the assessee company in their decision making process and it was utilized for the purpose of business. The USA company made available all the technical data, information, expertise to the assessee company which was absorbed and made use of by the assessee company in their managerial and financial decision making process and other decision in the development of the business. Therefore, the expertise and technology which was made available by the USA company is technical service within the meaning of Article 12(4)(b) of the DTAA between India and USA. Hence, this ruling of the Authority for Advance Ruling may not of any assistance to the assessee. We do not find any infirmity in the order of the lower authority. Accordingly the same is confirmed - we are inclined to uphold the orders of the CIT(A) and sustain the additions on account of non deduction of TDS on account of management fees for the relevant assessment years. - Decided against assessee Amount remains unpaid in AY 2012-13 - Even if the assessee credited the amount to the recipient account, the provisions of sec. 195(1) is applicable.
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