Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 567 - AT - Income TaxTDS u/s 195 - professional fees paid outside India without deduction of tax at source - disallowance u/s 40(a)(i) - PE existence - Held that:- From the details on record there is no material to establish that any technical knowledge, skill, etc. have been made available to the assessee in order to establish that it falls within the purview of Article 12 of the Indo-USA DTAA. It is also an undisputed fact that such non-residents recipients do not have any permanent establishment (PE) in India. We find that the similar issue was considered and adjudicated by the Coordinate Bench of this Tribunal in the assessee’s own case for A.Y. 2009 and the Coordinate Bench held in favour of the assessee that such income/amounts cannot be held to be chargeable to tax in India so as to require deduction of tax at source thereon and therefore invoking of section 40(a)(i) of the Act to disallow such expenditure is not sustainable In respect of the payment made by the assessee to KPMG, Ireland for audit services, it is not in dispute that the said services have been rendered outside India and the same cannot be construed as managerial or technical services so as to be governed by Article 13 of India-Ireland DTAA as contended by Revenue. In our view, they are clearly in the nature of independent personal services coming within the purview of Article-14 of the India-Ireland DTAA and therefore in the absence of any fixed place of business of the recipient, the said payments/income is not exigible to tax in India. In this view of the matter, we are of the considered view that the assessee is not liable to deduct tax on the aforesaid payment made to the non-resident entity in Ireland for the provisions of section 40(a)(i) of the Act to be invoked With respect to the payment made by the assessee to Siddharta Siddharta and Widjaja, Indonesia for rendering of audit services the assessee is not liable to deduct tax at source on the aforesaid non-resident entity in Indonesia for the provisions of section 40(a)(i) of the Act to be evoked. We, therefore, uphold the finding of the learned CIT(A) on this issue which has not been controverted before us by the Revenue. - Decided against revenue
|