Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1719 - AT - Income TaxTDS u/s 195 - assessee failed to deduct tax at source on payments made to Non-resident parties on account of professional fee - AO rejected the contention of the assessee that services rendered by the 6 non-resident entities are not in the nature of independent personal services - CIT-A deleted the addition - HELD THAT:- DR could not controvert the finding of the Ld. CIT(A) that the article on “ independent personal services” is applicable on income derived by a person who is an individual or firm of individuals or by an individual, whether in his own capacity or any member of a partnership firm. Further in the DTAA with Netherland, the word resident has been used for the benefit of independent personal services, which is wider than individual and the firm, who has rendered services is entitled to benefit of said provision. No error in the order of the Ld. CIT(A) on this issue. CIT(A) has also analysed in view of the various DTAAs that the services rendered by the those non-resident parties are not Fee for Technical Services. DR could not establish that any technical knowledge was made available in the process of providing services by the non-resident parties to the assessee. In absence of not making available, the technical knowledge to the assessee, in view of the Article 13 of the respective DTAAs, the payment for services cannot be held as fee for technical services under the provisions of the respective DTAAs. We do not find any error in the order of the Ld. CIT(A) on this issue also. CIT(A) has further observed that Article 13 of DTAAs provisions defining Fee for Technical Services being more favourable to the assessee as compared to the provisions of section 9(1)(vii) of the Act which has defined Fee for Technical Services, and thus the assessee was having option of choosing more favourable provisions of the DTAAs. In our opinion, the finding of the Ld. CIT(A) is in accordance with the established legal position on the issue. CIT(A) in view of the decision in the case of Van Oord ACZ India (P) Ltd versus CIT [2010 (3) TMI 167 - DELHI HIGH COURT] has held that the sum payable to the nonresidents was not chargeable to income tax in their hands and thus the assessee was not liable for deduction of tax at source on such payment under the provisions of section 195 and no disallowance under section 40(a)(i) could be made. - Decided against revenue.
|