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2018 (4) TMI 38 - AT - Income TaxPayment made by the assessee to the nonresident supplier constituted 'fees for technical services'(FTS) - Services rendered in pursuance of the purchase agreement could be taxed as FIS/FTS - India-Japan DTAA - whether the payments made by the assessee to Nippon for supply of D&D, as per the agreement, constituted FTS? - Held that:- D & D were not merely inextricably linked with the plant but the plant would not have been installed and commissioned without D&D. So, it can safely be said that D&D would constitute part of cost of acquisition of the Plant. In the case under consideration, it is also clear that the assessee was not exploiting the D&D for business purposes, that IPR of the D&D were retained by the non resident supplier. Considering the above, we hold that the FAA was not justified in holding that disputed amount was FTS. We have gone through the cases relied upon by the FAA. In none of the cases, referred to by him, the issue was not deliberated upon as to whether the consideration, received by a manufacturer of plant and machinery for supplying to its customer, wherein D&D was essential for installation of Plant and machinery, constituted part of cost of acquisition of plant. So, reversing the order of the FAA, we decide the effective Ground of appeal in favour of the assessee.
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