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2022 (2) TMI 979 - AT - Income TaxTDS u/s 195 - Addition u/s 40(a)(i) - legal and professional charges - disallowance has been confirmed holding the payment to be fee for technical services - Scope of provision of section 9 as well as that of the DTAA between India and USA - HELD THAT:- As submitted before us that these payments are not chargeable to tax and filed all the supporting evidences with respect to such payments before the AO and the same are also placed in the paper book. Copy of certificate given by a Chartered Accountant in form no. 15CB along with the information by the assessee in form no. 15CA as required to be filed before making any foreign currency remittance were furnished before the Assessing Officer and are also placed in the paper book. As submitted that one payment has been made to subscribe for information online for Iron & Steel prices from China. The subscription was paid earlier for two years. It is a renewal of subscription and claimed in the A.Y. 2009-10 and A.Y. 2010-11 which was accepted by the revenue. The copy of the party's invoice and payment advice of HDFC bank have been perused. On examination of the facts and evidences before us, we hold that this cannot be treated u/s. 40(a)(ia). With regard to reimbursement of travelling expenses from the Germany based company, the accounts have been reimbursed by the vendor in connection with the visit of the employees with regard to examination of the shipment consisting of rolled coils, non-alloy steel rolls at supplier's premises. CIT(A) held that the amounts have been reimbursed in connection with examination of quality, quantity and weight whether in conformity with the contract or invoice and held that such inspection and examination services are technical services provided. The total amount thus reimbursed - We find that the inspection and examination of the goods before shipment is a common practice and it cannot be treated as a technical service. The inspection with regard to quality, quantity and weight of the product pre-shipment of rolling coils, non-alloy steel rolls cannot be treated as technical and managerial services as per the provisions of the DTAA and Section 9(1) - we hold that decision of the ld. CIT(A) cannot be affirmed on this ground. Disallowance u/s. 14A - HELD THAT:- The assessee company has not earned any exempt income during the year under reference hence keeping in view the judgment in the case Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] no disallowance is called for u/s. 14A
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