Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 692 - AT - Income TaxTDS u/s 195 - payments made to non-residents for professional fees - disallowance u/s 40(a)(i) - payment has been made to various limited liability partnership firms - withholding tax - DTAA - Held that:- In absence of not making available, the technical knowledge to the assessee, in view of the Article 13 of the respective DTAAs, the payment for services cannot be held as fee for technical services under the provisions of the respective DTAAs. We do not find any error in the order of the Ld. CIT(A) on this issue. CIT(A) has further observed that Article 13 of DTAAs provisions defining Fee for Technical Services being more favourable to the assessee as compared to the provisions of section 9(1)(vii) of the Act which has defined Fee for Technical Services, and thus the assessee was having option of choosing more favourable provisions of the DTAAs. CIT(A) is in accordance with the established legal position on the issue . CIT(A) in view of the decision of Van Oord ACZ India (P) Ltd versus CIT (2010 (3) TMI 167 - DELHI HIGH COURT) has held that the sum payable to the nonresidents was not chargeable to income tax in their hands and thus the assessee was not liable for deduction of tax at source on such payment under the provisions of section 195 and no disallowance under section 40(a)(i) could be made. Order of the Ld. CIT(A) on the issue in dispute is well reasoned - Decided against revenue Addition to interest paid for delayed deposit of service tax - claim not allowable u/s 37(1) - Held that:- The interest paid on service tax is not penal in nature but compensatory in nature and thus it cannot be disallowed under provisions of section 37(1) of the Act. Further, disallowance of interest for delayed payment of Income-tax has been specifically mentioned under section 40(a)(ii) of the Act, whereas no such interest on service tax has been specified for disallowance. Accordingly, the finding of the Ld. CIT(A) on the issue in dispute is well reasoned - Decided against revenue
|