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2017 (11) TMI 1202 - AT - Income TaxTDS u/s 195 - non deduction tds on professional charges to one, M/s. Proskauer Rose LLP, USA, stated to be a law firm - payment admittedly is for representing the assessee (and one or more of its US affiliates, referred to collectively as the "clients") for the purpose of bidding on and potentially acquiring the business and assets of Qual Teq, Inc. - Held that:- Without doubt, the services rendered by the payee firm are in the nature of professional services covered under article 15. The income arising shall therefore be liable to be subject to tax only in the Contracting State, i.e., of which the payee, rendering services, is a resident, USA, in the instant case. The exceptions, being with regard to the 90 day stay in the other Contracting State (India) as well as a fixed base thereat, are clearly not applicable in the present case. As such, article 15 shall operate to exclude withholding tax, even where, on account of the asset/s (to be) acquired being brought to India, makes the relevant income as accruing or arising in India. As such, either way, no tax is deductible under section 195 on the impugned payment, so that the same could not be disallowed for non- deduction thereof under section 40(a)(i) of the Act. - Decided in favour of assessee.
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