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2018 (5) TMI 2070 - ITAT MUMBAIFee for technical services u/s 9(1)(vii) - amount received by assessee as standby maintenance charges was not in nature of 'Fee for technical services' under section 9(1)(vii) - After treating the amounts to be in the nature of ‘business income’, the CIT(A) held that the same are liable to be taxed in India vis-a-vis the turnover arising to the assessee with reference to the Indian business connection - HELD THAT:- We find that the issue regarding the nature of services came-up before the Tribunal for the first time in Assessment Years 1998-99 to 2000-01, and vide order dated 06.02.2015 [2015 (2) TMI 454 - ITAT MUMBAI] it was held that the same are not in the nature of ‘fee for technical services’. Subsequently, for Assessment Years 2001-02 to 2008-09, the matter again came-up before the Tribunal, and vide order dated 15.06.2015, the amount has been held not to be in the nature of ‘fee for technical services’ u/s 9(1)(vii) Therefore, following the decision of the Tribunal in assessee’s own case for the earlier years, so far as the Grounds raised by the Revenue are concerned, we find no reasons to interfere with the decision of the CIT(A), which is in line with the precedents in assessee’s own case by way of orders of the Tribunal (supra). Computation of the income from standby maintenance activities attributable in India - HELD THAT:- We find that the standby maintenance charges recovered by the assessee from TCL only qua the length of cable in the territorial waters of India needs to be considered for computing the profits or income accruing to the assessee u/s 9(1)(i) of the Act. The reasoning advanced by the Revenue to the effect that the standby maintenance charges are linked to the cable capacity is of no consequence for the present inasmuch as what is required to be decided is the income attributable to the business connection in India, which possibly is the length of the cable in the territorial waters of India. Therefore, in our view, it is only the revenue from TCL which is on account of standby maintenance charges proportionate to the cable length in India that deserves to be considered for computing the profit or loss from standby maintenance activity attributable to India in terms of Sec. 9(1)(i) of the Act. Therefore, on this aspect, we uphold the plea of the assessee and direct the Assessing Officer to verify the calculation made by the assessee in this regard in its computation of income and recompute the income accordingly. Thus, on this aspect, assessee succeeds as above. Charging of interest u/s 234B - HELD THAT:- As a settled proposition in terms of the judgment of Hon'ble Bombay High Court in the case of NGC Network Asia LLC, [2009 (1) TMI 174 - BOMBAY HIGH COURT] that there would be no chargeability of interest u/s 234B of the Act as the receipts on account of standby maintenance charges from TCL are subjected to withholding tax u/s 195 of the Act. On this aspect, it was also a common point between the parties that the said proposition has also been affirmed by the Tribunal in assessee’s own case in the orders dated 06.02.2015 [2015 (2) TMI 454 - ITAT MUMBAI] and also 15.06.2015 (supra). Thus, on this aspect, assessee succeeds.
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