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2006 (2) TMI 648 - AT - Income TaxLiability to deduct tax - Payment for Liaison with legal and financial advisors - Non-resident - Royalty Or fee for technical service - HELD THAT:- It is clear that such payment is purely for services. Since payment for technical services is not covered under DTAA, hence no TDS is required as provisions of DTAA will prevail as per decision of Supreme Court in the case of Union of India v. Azadi Bachao Andolan [2003 (10) TMI 5 - SUPREME COURT]. Such payments in no way can be considered as royalty as for rendering such service one is not imparting information concerning technical, industrial, commercial or scientific knowledge, experience or skill. We are not in a position to decide the issue in absence of details of information as received by the appellant, whether information provided is secret based on experience or skill ? Another aspect which is to be considered as to whether the consideration paid is for information which is of perpetual or extended use. If the non-resident company is providing support on the basis of facts and information collected by appellant and thereby suggesting ways and means with the aim of providing support to develop specified areas relevant to marketing and financial areas, then - consideration paid may not be termed as royalty. Hence on the deduction of tax at source in respect of payment for following item the matter Is restored back on the file of learned ITO (TDS). In the result the appeal is treated as partly allowed.
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