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2020 (9) TMI 668 - AT - Income TaxTDS u/s 195 - payments made for services provided by SII, USA were in the nature of technical services liable for deduction of tax at source - income deemed to accrued or arise in India - CIT(A) confirming the action of ITO that services provided by System Integration Inc. USA are covered as fees under the India-USA double taxations avoidance agreement (DTAA) and hence taxable under Article 12 of DTAA - HELD THAT:- Payment made by the assessee to Non resident company SII is not for any fee “for technical services” and the payment was only towards commission for procurement of orders and reimbursement of incidental charges incurred. Since the payment was not for “fees for technical services” and further the payment was made to the Non residential company having no permanent establishment or business connection in India, the alleged payment for procurement of orders are not subject to deduction of tax at source u/s 195. CIT(A) erred in confirming the action of the Ld. A.O. - alleged payments to SII in USA during Financial Year 2014-15 and 2015-16 respectively are only towards the charges for procurement or orders and reimbursement of expenses and are not in the nature of “fees for technical services” and thus do not fall in the ambit of Section 9 of the Act and thus Section 195 of the Act is not applicable in these payments - Decided in favour of assessee.
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