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2011 (5) TMI 150 - AT - Income TaxDisallowed u/s 40(a)(i)- Deduction of tax at source - The Tribunal had followed the decision of the Hon'ble Madras High Court in the case of Skycell Communications Ltd. v. Dy. CIT [2001 -TMI - 13961 - MADRAS High Court], held that what was paid by the assessee was by way of training fee for training its personnel or customers to explain to its proposed buyers, the salient features of the products imported by the assessee in India and to enable the customers to use the equipment, due to which, the payment could not have been made for availing technical services; that the technology was never made available to the assessee; that rendering services by using technical knowledge or skill is different from charging fee for technical services; that the knowledge imparted was as to how to use the machinery; that therefore, the amount did not fall within definition of 'fee for technical service', as defined in Explanation 2 to section 9(1)(vii) of the Act; And that so, section 40(a)(i) of the Act had no application - Hence, the appeal filed by the department stands dismissed.
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