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2016 (5) TMI 1171 - AT - Income TaxTDS u/s 195 - assessee in default - withholding of tax - A.O in treating the assessee as an assessee in default for not deducting tax at source on remittances made to M/s. RPS Energy Ltd., U.K. - India-UK DTAA - Activity of carrying out the 3D Seismic interpretation including basin modeling, culminating in prospect generate along with GRV calculations, play fairway mapping and risking of prospects for exploratory drilling. The A.O further observed that the non-resident is furnishing the report which consists development and transfer of a technical plan and technical design which enables the assessee to take decision of exploration in the Block MB-OSN-20-5/2. The A.O further observed that the report contains number of Maps, designs, Seismic Data charts and figures. Held that:- For the sake of completeness, there are significant distinction between the definition as prescribed u/s. 9 of the Act of “fees for technical services” as compared with the definition prescribed in Article 13 of Indo-UK treaty. But the settled law is that the provisions of DTAA overrides the provisions of IT Act in the matter of ascertainment of taxability under the Income Tax Act. At this juncture, it is worth to mention the decision of the Hon’ble Supreme Court in the case of GE India Technology Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT OF INDIA] wherein the Hon’ble Apex Court has decided that there was no obligation for withholding tax on any person making payment to a non-resident, if the payment made to non-resident is not chargeable under the provisions of the I.T. Act. After considering the totality of the facts of the case in hand, in our considered opinion, the revenue could not prove that there was transfer of Technology by M/s. RPS Energy Ltd to the assessee nor it has been proved that the impugned transactions have made available technical expertise skill or knowledge by processing the data provided by the assessee. Nor it has been proved that the assessee can apply independently and without assistance and undertake such survey independently excluding RPS Energy Ltd. in future. Assuming that M/s. RPS Energy Ltd., rendered services as defined u/s. 9(1)(vii) Explanation 2 of the Act, yet it does not satisfy the requirement of technical services as contained in India-UK DTAA. We set aside the findings of the ld. CIT(A) and direct the A.O to delete the impugned addition. - Decided in favour of assessee.
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