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2021 (9) TMI 105 - AT - Income TaxTDS u/s 195 - Addition u/s 40(a)(i) - fees for technical services liable for TDS or payment for purchase of software - DTAA provisions - HELD THAT:- AO has simply stated that the assessee is liable to deduct tax at source from the impugned payment made to the AE, i.e., he has not addressed the submissions made by the assessee before him that the impugned payment would not fall under the category of royalty or fee for technical services - AO has also not given any independent finding on it. AO has also not discussed about the nature of services provided by the AE to the assessee. Unless the type and nature of services are analysed vis-à-vis relevant DTAA provisions, it would not be possible to come to a conclusion on this issue. Tax authorities have not examined the factual aspects properly taking into consideration the definition of the terms namely “Royalty” and “Fee for technical services” as given in DTAA. Since the impugned payment is covered by DTAA, the A.O. is required to be examined the taxability of these payments and liability to deduct tax at source in accordance with the provisions of DTAA unless it is shown by the assessee that the provisions of Indian Income Tax Act is more beneficial to it. It has been held in the case of Engineering Analysis Centre of Excellence (P) Ltd [2021 (3) TMI 138 - SUPREME COURT] - we are of the view that this issue requires fresh examination at the end of the A.O - Appeal filed by the assessee is treated as allowed for statistical purposes.
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