Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 761 - AT - Income TaxNon deduction of TDS - shooting of films held outside India - payments made in foreign exchange to overseas services providers - application u/s 195(2) - India - U.K. DTAA - Held that:- This issue is squarely covered in favour of the assessee by the decision of in the case of GE India Technology Centre P. Ltd. v. CIT [2010 (9) TMI 7 - SUPREME COURT OF INDIA] wherein held that if the relevant payment does not contain the element of income taxable in India, the payer cannot be made liable to make an application u/s 195(2). Merely because some managerial skill is required to render the services, it would not make the services to be managerial services as envisaged in Explanation 2 to section 9(1)(vii). Keeping in view the nature of services rendered by the overseas service providers to the assessee the said services cannot be treated as technical services within the meaning given in Explanation 2 to section 9(1)(vii). As in agreement with the CIT(Appeal's) that the said services rendered outside India by the overseas service providers in connection with making logistic arrangement are in the nature of commercial services and the amount received by them from the assessee for such services constitutes their business profit which is not chargeable to tax in India in the absence of any PE in India of the said service providers. The requirement of knowledge of local laws on the part of the service providers to render the services such as obtaining the permissions for shooting from the local authorities or for arranging insurance of the crew members and shooting equipments would not change the basic nature of the services which otherwise are commercial services. The assessee, therefore, was not liable to deduct tax at source from the said payments and the AO was not justified in treating the assessee as in default u/s 201 - in favour of assessee.
|