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2016 (7) TMI 104 - AT - Income TaxTDS u/s 195 - FTS/FIS - fee for technical services / fees for included services - AO Passed order u/s.201(1) & 201(1A) r.w.s.195 on the basis that the assessee had made payments to non-resident parties on which he has not deducted the tax. - Article 12(4)(b) of DTAA - Held that:- Payment of consideration would be regarded as 'fee for technical/included services' only if the twin test of rendering services and making technical knowledge available at the same time is satisfied. In the present case, the non-resident renders Bio-analytical services which, no doubt, are very sophisticated in nature, but it does not reveal to the assessee as to how it conducts those tests or the inputs that have gone into it, so as to enable them to carry out those tests themselves in future. A broad description or indication of the type of test carried out to reach this conclusion does not enable the assessee to derive requisite knowledge to conduct the tests or to develop the technique by itself." Thus, the said services were not made available to the assessee and therefore, the services provided to the appellant by the non-resident parties of USA and Canada did not fall within the purview of 'included services' under Article 12(4)(b) and hence there was no liability on the appellant to deduct TDS u/s. 195 of the I.T. Act, while making payment for such bio-analytical services rendered to it. - Decided against the revenue.
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