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2014 (1) TMI 1285 - AT - Income TaxNature of payment – Payment can be treated as Royalty u/s 9(1)(vi) of the Act r.w Article 12 of DTAA or not - Benefit of tax treaty between India and Singapore – Assessee resident of Singapore – Held that:- The nature of services rendered to the appellant does not qualify for the definition of 'royalty' either in terms of the Income-tax Act, 1961 or the DTAA between India and Sri Lanka - there is no specific clause relating to taxation of fee for technical services in India-Sri Lanka DTAA - the payments made by appellant to CSPL can only be taxed as business profit under Article 7 of the DTAA and not as fee for technical services under the provisions of domestic law - business profits of CSPL or CTU or Sites cannot be taxed in India and it is held that no tax is required to be deducted in respect of payment made by the appellant to CSPL for conducting clinical trials outside India. The services in question are services for supply of information which assessee is not using for any technical know how but it is working as a conduit for supply of this information further to BHAG - Thus, the assessee is making remittance for procurement of commercial information for onward transmission to the principal BHAG - the remittance made by the assessee is not for availing technical services and does not amount to royalty and is not liable for withholding taxes as held by assessing officer - The order of CIT(A) is upheld – Decided against Revenue.
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