Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (9) TMI 232 - AT - Income TaxIndo-Italian DTAA. - TDS on payment made to non residents - Nature of payment - overseas commission or fee for technical services (FTS) - Revenue contended that the payee in question had rendered technical services in the nature of 'systematic research' to the assessee and received fee in lieu thereof, which is liable to be taxed as per Article 13 Held that:- In sub-section (1)(vii) of section 9, income by way of 'fee for technical services' is defined - Section 9(1)(i) is a general provision whereas, clause (vii) is in the nature of specific provision Explanation introduced by Finance Act, 2010 makes it categoric that in cases covered by clause (vii) or for that section 9, sub-section (1)(vi) - (vii), it would not be necessary for the non-resident to have residence or place of business or business connection in India - In case of 'fee for technical services', the mandate of the legislative is that clause (vii) would have overriding effect by virtue of aforesaid explanation to section 9(1)(i). In present case, assessee has paid for 'systematic research' made by the overseas entity - In Explanation 2 of clause (vii) (supra) of section 9(1) with effect from 01.04.1977, fee for 'technical services' means any consideration paid for 'technical' or 'consultancy' services It is held that word 'technical' services would imply an operation involving skilled precision which 'systematic research' also involves Payment made to overseas entity amounts to fees for 'technical' services - Hence, assessee was liable to deduct TDS as per the provisions of the Act, failure of which would entail disallowance under section 40(a)(ia) of the Act Decided in favor of Revenue.
|