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2023 (7) TMI 805 - AT - Income TaxRevision u/s 263 - fees towards supervisory charges - composite contract or can be segregated - income taxable in India - CIT while examining the scope of the contract including the nature of receipt under different heads formed an opinion that it is a composite contract and this fee under the head “supervisory services’ (i.e. item (e) above), cannot be segregated at the instance of assessee and this aspect was not examined by the AO constructively either in the assessment order or during the assessment proceeding - assessee has been contending that it has received fees towards supervisory charges and since it has not made available technical knowledge about providing of these supervisory charges, therefore, u/a 13 of India-UK Treaty, this receipt will not fall in the ambit of FTS and not taxable - HELD THAT:- As clauses if read into clauses starting from the Article 3, then, would reveal that it is a fee for one part from the composite contract and it cannot be segregated. This service was not being provided on a item which can be consider as stand alone item even without availability of this agreement. As far as the first-fold of submission of assessee AO has perused the submission of the assessee, we are of the view that the assessee had made a fatuous attempt to goad the adjudicating authority in a field, where facts are not available. The theory of conditions enumerated in Article 13 of the DTAA between UK and India is totally misplaced. The enquiry at this angle is to be made if it is determinable that services provided by the assessee are stand alone services and not dependent upon the agreement. It is an unnecessary argument raised by the assessee before AO for absolving from tax liability and this effort was not examined by the ld. Assessing Officer elaborately and diligently. If agreement is being perused, then, it would give a meaning that it is a composite agreement and different category of receipts cannot be segregated from it. Therefore, this concept of applicability of Article 13 is not at all applicable in the present case. The facts to that effect are not available precisely. Non-examination of AO with that angle has caused prejudice to the interest of the Revenue. The ld. CIT has rightly set aside this order by exercising powers under section 263. The observations made by us will not impair or injure the case of the Revenue and will not cause any prejudice to the defence/explanation of the assessee on merit. The observations made by us are for the purposes of bringing home our conclusion in support of the order of ld. CIT in this appeal. Therefore, the issue that has been relegated by the ld. CIT for fresh hearing - Appeal filed by the assessee is dismissed.
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