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2018 (6) TMI 359 - AT - Income TaxTaxability of Executive Search Services fees - tds u/s 195 - search fee received under the SA - PE in India - Held that:- We are of the opinion that the search fee and license fee were distinct from each other and that the search fee received under the SA was independent of the LA and was not taxable in India as FTS under Article 12(5)(a)of the DTAA. It is a fact that in earlier years the AO himself had held that fees under the both the agreements were separate and that only licence fees was taxable. No hesitation in holding that the search fee could not be treated to be ancillary and subsidiary to LA, that the same did not in any way aid, promote or supplement the application or enjoyment of the right, property, or information, that the search fee received under the SA was independent of the LA and was not taxable in India. Ground of appeal is decided in favour of the assessee. Taxability of amount reimbursed to the assessee by the Indian entity for expenses incurred on its behalf - DTAA - Held that:- Following the judgement in case of DIRECTOR OF INCOME TAX (IT) – I VERSUS A.P. MOLLER MAERSK AS [2017 (2) TMI 993 - SUPREME COURT] once the character of the payment was in the nature of reimbursement of the expenses, it could not be income chargeable to tax. Moreover, freight income generated by the assessee in the assessment years in question was accepted as not chargeable to tax as it arose from the operation of ships in international waters in terms of article 9 of the DTAA. Once that was accepted and it was also found that the Maersk net system was an integral part of the shipping business which was allowed to be used by the agents of the assessee as well in order to enable them to discharge their role more effectively as agents, and the business could not be conducted without it, it could not be treated as any technical services provided to the agents - Decided in favour of assessee
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