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2018 (5) TMI 2033 - AT - Income TaxTDS u/s 195 - applicability of Indo US treaty to the receipt in question - payment to M/s. CSA International ISA for the purpose of obtaining witness testing of ACT contractor as part of CB report and KEMA certification - applicability of provision of section 40(a)(ia) - HELD THAT:- As per Memorandum Of Understanding dated 15.05.1989 of the DTAA with respect to Article 12(4), it is stated that generally speaking technology will be considered “made available' when the person acquiring the service is enabled to apply the technology. The fact that the provision of the services may required technical input by the person providing those services does not per se mean that the technology or technical knowledge etc are “made available‟ to the persons purchasing that services. The identical issue has been considered by the coordinate bench in NQA Quality Systems Registrar Ltd Vs. DCIT [2004 (12) TMI 323 - ITAT DELHI-F] where the UK company was authorized to issue ISO Certification and it was held that such services does not result in “making available‟ those services to the recipient. The revenue could not show that how the assessee would be able to make such certification on its own. We are also of the view that as assessee is not an accredited institute to carry out such activities on its own as provider of the services has not made such services available to the assessee. It does not satisfy the criteria laid down under Article 12(4)(b) as fees for included services according to Indo US DTAA, hence, services are not chargeable to tax in India. Accordingly, no tax should have been deducted thereon, and hence, no disallowance u/s 40(a)(i) of the Act can be made. Hence, we direct the ld AO to delete the disallowance u/s 40(a)(i) - Appeal of the assessee is allowed.
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