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2011 (8) TMI 159 - AT - Income TaxTDS u/s 195 - Fees for technical services - Assessee in default - According to the Assessing Officer the payment by the assessee to KPMG did not fall within the exceptions and, therefore, the payment would be income which accrues or arises in India in the hands of KPMG chargeable to tax - It was pointed out that the objective of appointing KPMG was to identify and acquire sugar mills/distillery plants in Brazil - KPMG being one of the leaders in Brazil in Mergers and Acquisitions (M&A) in the sugar and alcohol section and have already advised in transactions related to disposals of sugar mills and sugar refinery were being engaged for the aforesaid purpose - The dispute is whether the exceptions mentioned in clause (b) to section 9(1)(vii) of the Act would apply so that it can be said that the fees in the nature of FTS has not accrued or arisen to KPMG in India - assessee was contemplating to create a source for earning income outside India. It is no doubt true that the source of income had not come into existence - There is nothing in the language of section 9(1)(vii) clause (b) of the Act, which would go to show that the same is restricted to only to an existing source of income - Decided in favor of the assessee
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