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2018 (6) TMI 965 - ITAT DELHIIncome accrued in India - Fees for technical services - amount received by the assessee from its Indian customers - DTAA between India and United Kingdom - services made available to the Indian parties - Held that:- Assessee is foreign company resident of UK and is tax resident of UK - customers of the assessee in India appoints the assessee on a principal to principal basis to provide inspection and testing services - as per Article 13 of Double Taxation Avoidance Agreement the fees for technical services can be chargeable to tax in India only if such services are "made available" to the receipt of such services - according to us, the assessee has not at all made available any such services to the Indian entity but has merely provided the services in the ordinary course of its business - revenue has not brought on any material to show that subsequently the recipient of those services have performed these services on their own without the help of the assessee or any other similar service provider. Inspection and survey of imported/exported cargo and certifying in relation to the quality and price, provision of such services does not make available technical knowledge, experience, skill, know-how or processes to the recipient of the service - as per Article 13(4)(c) of the DTAA these services are not made available to the Indian parties - thus we held that ₹ 18772897/- received by the assessee is not chargeable to tax in India - Decided in favor of assessee. Initiation of penalty u/s 271(1)(c) - Held that:- Assessee is providing the services of technical nature - assessee is resident of UK and therefore, is eligible for benefit contained therein - assessee claim that services of the assessee are not made available to the Indian entities has been rejected - in AY 2014-15 that such services does not satisfy “make available” test under Article 13(4)(c) of the DTAA - hence it is said that it is merely the rejection of the claim of the assessee. It is not the case of the revenue that assessee has made any false claim - thus in view of the decision in case of CIT Vs Reliance Petro Products Ltd [2010 (3) TMI 80 - SUPREME COURT] it cannot be said that the submission or claim of the assessee is not accurate - hence we reverse the finding of the lower authorities and direct the AO to delete the penalty u/s 271(1)(c) - Decided in favor of assessee.
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