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2020 (10) TMI 986 - AT - Income TaxTDS u/s 195 - Demand raised u/s 201(1) and 201(1A) - assessee has been making payments to its US subsidiary which were in the nature of selling and marketing expenses - AO took the view that the impugned payments are in the nature of “Fee for technical services” - assessee submitted that the services carried out by its US subsidiary are in the nature of targeting new customers, carrying out promotional activities and participating in trade shows outside India on behalf of the assessee - HELD THAT:- We notice that the AO has not properly analysed the nature of services rendered by M/s Adadyn Inc., USA, in the context of sec. 9(1)(vii) or DTAA, even though he has extracted the agreement entered between the assessee and M/s Adadyn Inc. Assessee contention that nature of services provided by the above said company is in the nature of business support services and not in the nature of consultancy services in strict sense. It is not shown that the above said contention of the assessee is wrong. Nature of services provided by M/s Adadyn Inc., USA has not been analysed by Ld CIT(A) also. On the contrary, it is the contention of the assessee that the first appellate authority has entertained erroneous belief that the assessee has been using market analysis/ online data/data bases etc., belonging to M/s Adadyn Inc. The above said observation of Ld CIT(A) was strongly objected to by the assessee. Hence the observation of the Ld CIT(A) that a part of payment constitutes Royalty is strongly disputed. CIT(A) has also not properly analysed the provisions of article 12 of India USA DTAA. Without analysing the nature of services, the Ld CIT(A) has observed that the services were made available. Thus, we notice that the Ld CIT(A) has rendered the decision without bringing on record supporting materials and also without properly analysing the provisions and contentions of the assessee. In the absence of proper analysis of facts relating the issues contested before us, it would be difficult for the Tribunal to adjudicate them. Thus all the contentions of the assessee require fresh examination at the end of Ld CIT(A). Assessee appeals are treated as allowed for statistical purposes.
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