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2023 (3) TMI 1106 - AT - Income TaxTDS u/s 195 - Default u/s 201(1) and 201(1A) - payment for designing of towers made to a foreign company in UAE - payment for designing of towers made to Oilstone UAE was in the nature of FTS OR royalty - HELD THAT:- There is no allegation that the service provider i.e. Oilstone UAE has Permanent Establishment (PE)/business connection in India so as to hold that the services may be taxable in India under Article 7 of the India UAE Tax Treaty. Since the payment do not qualify as FTS under the India UAE Tax Treaty in absence of FTS clause in the said treaty, we are of the considered view, that there was no requirement for the assessee to withhold taxes on such payments made to Oilstone UAE. In the instant case, the assessee had also furnished declaration regarding “No Permanent Establishment in India” of Oilstone UAE to the assessing Officer during the course of assessment hearing. Further copy of Tax Residency Certificate (TRC) to the effect that Oilstone UAE is a tax resident of UAE was also furnished before the assessing Officer during the course of proceedings under section 201 - we are of the considered view that the assessee was not under an Obligation to withhold taxes on such payments made to Oilstone UAE. Accordingly, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. Appeal of the Department is dismissed.
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