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2019 (5) TMI 279 - AT - Income TaxDisallowance u/s. 40(a)(ia) - professional and technical services payments to non-residents - TDS u/s 195 - payments for subscription fees for accessing the server of Intelliqip for the pump data - Income accrued in India - DTAA with USA - PE in India - HELD THAT:- Payments is not in the nature of fees including services is covered under Article 12 of DTAA and same falls under Article 7 as business profit and Intelliquip non-resident company does not have any permanent establishment in India and therefore it is not taxable in India. The payments made by the assessee are in the nature of subscription fees and on verifying the invoices demonstrated by the ld. AR of assessee. Prima facie the payment is for the usage of data by the assessee. Therefore we are of the opinion that the payments as discussed in the above paragraphs is non-taxable in India and therefore no TDS is deducted and in the nature of subscription, therefore we set aside the order of CIT(A) on this ground and direct the Assessing Officer to delete the addition. Exemption u/s. 10(23FB) - income received from Venture Capital Fund - provisions of section 115U - HELD THAT:- We found that the income received from the Venture Capital Fund is exempted. We found that the assessee has made investments into the Venture Capital fund and received profits which are exempted. CIT(A) though considered the aspects of Joint venture but dealt only on the findings of the AO by treating the same as income of the assessee and the observations of the CIT(A) that the assessee could not satisfy with evidence i.e. how the assessee is entitled to claim exemption; Even before us the assessee has not filed any information in respect of investment made in Joint Venture and no material filed, we found that this issue has to be verified and examined and accordingly we restore this issue for limited purpose to the file of Assessing Officer and allow the ground of appeal for statistical purposes. Disallowance u/s. 14A r.w. Rule 8D - HELD THAT:- As decided in PRAGATHI KRISHNA GRAMIN BANK VERSUS THE JOINT COMMISSIONER OF INCOME TAX, BELLARY RANGE [2018 (6) TMI 1283 - KARNATAKA HIGH COURT] shall be on a reasonable proportion to exempted income and we restore this issue to the file of AO to recompute the disallowance after verification of details and accordingly the ground of appeal is allowed for statistical purposes.
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