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2020 (11) TMI 901 - AT - Income TaxTDS u/s 195 - TDS on salary as per provisions of section 40(a)(i) - payment made from India to the employees of Head Office - assessee is a company registered in Netherlands - DTAA between India and Netherelands - as per asseseee that the salary has been paid abroad by the foreign company to its employees and the head office has apportioned a part of the salary expenses to the assessee which the assessee has debited and has reimbursed the Head Office without any mark up - HELD THAT:- Since the facts of the instant case are identical to the facts of the case decided by MOTHER DAIRY FRUIT, VEGETABLE (P) LTD. [2010 (10) TMI 852 - DELHI HIGH COURT] therefore, respectfully following the said decision we hold that the assessee is not liable to deduct tax at source from the salary paid to the non resident and has not committed any default in not deducting tax at source from the reimbursement to the head office on account of salary expenses. Accordingly the order of the Ld. CIT(A) is set aside and the grounds raised by the assessee are allowed. Non deduction of tax at source, on professional fees etc - payment being reimbursement of technical expenses, in turn remitted to foreign professionals located outside India, paid outside India - taxation under Article of 14 of India- Netherlands DTAA - HELD THAT:- As decided in M/S GRANT THORNTON INDIA LLP [2019 (7) TMI 1719 - ITAT DELHI] Since the assessee has made the payment outside India to independent professionals, therefore, in view of Article 14 of India Netherlands DTAA the assessee is not liable to deduct any tax from such payment. Therefore, the order of the Ld. CIT(A) is set aside and the grounds raised by the assessee are allowed. Addition being income on account of consultancy services as FTS u/s 9(1) (vii) r.w. Article 12(5) of subject DTAA and taxed the same at 10% - HELD THAT:- A perusal of the order of CIT(A) shows that despite his asking to provide the details of key professional staff/consultants who had worked on the DMIC Project and to explain whether services were rendered from the existing project office for the PSRBDB and the manner in which the services were rendered to the DMRC Project and to furnish the breakup of expenses in the said project, the assessee failed to produce the same before the CIT(A). Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the CIT(A) with a direction to give one more opportunity to the assessee to file the above documents and to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. While doing so, he shall also keep in mind the alternate argument of Ld. Counsel for the assessee to tax the receipt @ global profit rate and not the entire amount as added by the AO and upheld by CIT(A). The grounds raised by the assessee are accordingly allowed for statistical purposes.
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