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2012 (2) TMI 534 - AT - Income TaxTDS u/s 195 - Held that:- When the equipments were not operated, used or under the control of the assessee, then the payments made for availing the services of Rackspace cannot be said as royalty. When the payments are not in the nature of royalty as per Indo-USA DTAA as well as per Explanation 2 (via) of Sec. 9(1) of the I T Act, then recipient of the said payments being non-resident having no PE is not liable to tax in India. Therefore, the payments in the hands of Rackspace are not taxable in India and consequently, no tax required to be deducted u/s 195 on such payment/remittance by the assessee as held by the Hon’ble Supreme Court in the case of GE India Technology Centre P. Ltd. v. Commissioner of Income-tax reported in [2010 (9) TMI 7 - SUPREME COURT OF INDIA ].
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