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2016 (11) TMI 730 - AT - Income TaxTDS u/s 195 - whether Legal fees paid to non-resident Attorneys constitute royalty as per India-UK DTAA and also constitute ‘Royalty’ / ‘Fees for technical services’ [FTS] u/s. 9(1)((vi)/vii)? - PE in India - Held that:- Payment in question do not get covered by Section 9(1)(i) due to the fact that the payee has neither business connection in India nor any permanent establishment in India. The assessee has obtained the legal services and such services find specific treatment as per Treaty Article 15 and therefore, not covered by Article 13 which deals with ‘Royalty and Fees for Technical Services’ Moreover, Article 15 applies not only to individual but to firms also as upheld by Special Bench of the Tribunal in the case of M/s Clifford Chance Vs. Asstt. DIT (IT)(2013 (6) TMI 544 - ITAT MUMBAI ). Therefore, in the absence of any business connection in India or permanent establishment of India and considering the fact that services are rendered outside India and no employee of the attorneys were present in India for more than 90 days, we are of the considered view that impugned payments are not taxable in India as per Treaty provisions Hence, the assessee was not liable for tax deduction at source from impugned payment. - Decided in favour of assessee.
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