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2019 (7) TMI 609 - HC - Income TaxTDS u/s 195 - payment for Fee for Technical Services - no PE India - applicability of Section 9(1)(vi) and Section 9(1)(vii)(b) - DTAA between India and Srilanka, Germany and UAE - all the authority has held that TDS is deductible - HELD THAT:- If we examine the terms and conditions mentioned in the work order, more particularly the scope of work and the various clauses contained therein, we have no hesitation to hold that the nature of activity done in Srilanka is not mere construction or assembly or mining like project. Admittedly, the installation of wind turbine is a highly skilled and technical work. The various clauses in the work order clearly demonstrates the scope of work and therefore, we cannot but hold that the AO was right in concluding that the services rendered by M/s.WFPL is in the nature of Fee for Technical Services. Similarly, with regard to the services rendered by M/s.WRS, Germany was stated by the assessee to be a repair work. The AO after taking note of what is the type of repair work which would accrue in wind turbine, concluded that the repairs are not mundane repairs but require highly sophisticated techniques and accordingly held that it is in the nature of technical services. After analysing the type of services rendered by M/s.E&Y at UAE, the AO held that the market study is in the nature of technical services and the remittance is to be treated as Fee for Technical Services. We find that there is no error in the said conclusion especially when it has been rendered on appreciation of the scope of work based on the documents placed by the assessee before the AO. Therefore, we find that the conclusion arrived at by the two authorities and the Tribunal on all the three issues does not call for interference. Delhi Court in Havells India Ltd [2012 (5) TMI 449 - DELHI HIGH COURT] after analysing Section 9(1)(vii)(b) has held that in order to get the benefit of the first exception it is not sufficient for the assessee to prove that the technical services were not utilised for its business activities of production in India, but it is further necessary for the assessee to show that the technical services were utilised in a business carried on outside India and further in order to fall within the second exception provided in Section 9(1)(vii)(b), the source of the income, and not the receipt, should be situated outside India. The decision in the case of Havells India Ltd.(supra) would apply with full force to the case on hand. In any event, as observed by us earlier the finding rendered by the Assessing Officer, affirmed by the CIT(A) and the Tribunal revolves entirely on the interpretation of the terms and conditions of the work order/contract and in the absence of any perversity, we decline to interfere in the matter as no substantial question of law arises for consideration.
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