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2017 (10) TMI 245 - AT - Income TaxDisallowance u/s. 40(a)(i) - maintenance of aircraft and engine/repairs and maintenance of aircraft and travelling and accommodation charges - PE in India - Held that:- The impugned expenditure has been incurred by the assessee in pursuance of maintenance contract between the assessee and M/s EAT, Germany. In the case of Kandla Port Trust (2011 (11) TMI 469 - ITAT RAJKOT ), it was held that the payment made for annual maintenance contracts would not fall under the category of fee for technical services within the meaning of provisions of sec. 194J of the Act. In the case of DDRC SRL Diagnostic (P) Ltd (2015 (10) TMI 2366 - ITAT MUMBAI) the co-ordinate bench has noticed that the CBDT has expressed the view in Circular No.715 (supra) that routine, normal maintenance contracts which includes supply of spares will be covered by sec. 194C of the Act. In the instant case no material was placed before us to show that the clarifications issued by the CBDT would not apply to the facts of the present case. Hence, consistent with the view taken in the above cited cases, we hold that the payment made towards annual maintenance contracts would fall under the category of works contract. In that view of the matter, the payment given by the assessee would constitute business receipts in the hands of M/s EAT and the same is not taxable in India, since it does not have PE in India. In that case, there is merit in the contentions of the assessee that it is not required to deduct tax at source u/s 195 of the Act, as no part of the amount paid to M/s EAT is chargeable in India in the hands of M/s EAT. - Decided in favour of assessee. Disallowance u/s. 40(a)(i) in respect of travelling and accommodation charges - Held that:- At the time of hearing, the assessee was asked to furnish break-up details of reimbursements duly describing the details of deduction of tax at source. However, till the date of finalizing this order, the same has not been received. In any case, the claim of the assessee requires verification at the end of the AO. Accordingly we set aside the order passed by the AO on this issue and restore the same to his file with the direction to examine this issue afresh by duly following the ratio of decision rendered in the case of ASK wealth advisors (P) Ltd (2015 (10) TMI 921 - ITAT MUMBAI ). - Decided in favour of assessee for statistical purposes.
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