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2017 (1) TMI 246 - AT - Income TaxPayments to overseas payees located at Switzerland, Canada and USA without deducting any TDS - whether the above remittances were in fact in the nature of fee for royalty/technical services covered by deeming fiction under section 9(1)(vi) and (vii) ? - DTAA applicability - Held that:- There is hardly any dispute about section 90(2) of the Act envisaging that in case there exists a Double Taxation Avoidance Agreement in respect of any country, provisions of the Act apply to the extent they are more beneficial to such an assessee and not otherwise. The assessee in the instant case refers to Indo-Portuguese DTAA containing “make available” condition to be applied in case of its Swiss remittances as per Indo-Swiss DTAA Protocol on the ground that although such a “make available” condition in respect of technical services is not explicitly contained in latter DTAA, same is deemed to have been applicable by virtue of Indo-Portuguese DTAA Protocol specified hereinabove involving a specific condition to this effect. This plea fails to impress upon us. We make it clear that no “make available” articles in respect to fee for technical service is used in Indo- Swiss DTAA or Protocol. The said protocol only postulates that India and Swiss shall enter into negotiation to this effect if former State enters into a DTAA with a member of OECD State either reducing rate of tax or restricting the scope of specified categories of income hereinabove. Revival of section 201(1) and 201(1A) demands pertains to TDS not deducted upon assessee’s canadian and american remittances hereinabove. There is no dispute that India and these countries have entered into DTAAs and same contain “make available” stipulation with respect to the impugned services to be involved in corresponding Article 12(4)(b) in both cases. The Revenue fails to take us through any evidence that assessee’s payees in question based in Canada or USA have made it available their expertise and technical knowhow thereby enabling it to use the same independently without their assistance. It transpires that these payees have merely rendered consultancy services without imparting any knowledge. We find that no reason to interfere with the ld.CIT(A) observation extracted hereinabove quoting various judicial precedents in support as well.
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