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2007 (11) TMI 436 - AT - Income TaxDeduction of tax at source u/s 194C instead 194J - Assessee in Default u/s 201(1)/201(1A) - nature of payments is Professional services or fees for technical services or Not - maintenance support agreement fabrication of chilled water line work order for thermal insulation/erection conversion of partially oriented yarn (POY) into polyester textured yarn and twisted yarn - HELD THAT - In the present case it is seen that there may be use of services of technically qualified persons to render the services but that itself do not bring the amount paid as fees for technical services within the meaning of Explanation 2 to section 9(1)( vii ). The amounts paid are towards annual maintenance contract of certain machinery or for converting POY into textured/twisted yarn. The technology or the technical knowledge of the persons is not made available to the assessee but only by using such technical knowledge services are rendered to the assessee. In such a case it cannot be said that the amount is paid as fees for technical services . Rendering services by using technical knowledge or skill is different than charging fees for technical services. In a latter case the technical services are made available due to which the assessee acquired certain right which can be further used. In the present case it is not so. The persons rendering certain services has only maintained machinery or converted yarn but that knowledge is not now vested with the assessee by which itself it can do research work. Thus the amount paid cannot be considered as fees for technical services within the meaning of section 194J of the Act. In the result the appeal is dismissed.
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