Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 33 - AT - Income TaxTDS u/s 195 - disallowance u/s 40 (a) (i) being professional fees paid outside India without deduction of tds - CIT- A has referred to the several judicial precedent of BSR and Co LLP on identical issue wherein it has been held that no tax is required to be deducted at source on various payments to the foreign consultant because of the reason that the services do not ‘make available’ those services to the assessee - HELD THAT:- Wherever the Double Taxation Avoidance Agreement did not contain the article of Fees For Technical Services, we are of the opinion that it cannot go to the article of ‘other income’ only because of the reason that FTS article is not there in the Double Taxation Avoidance Agreement. To bring it under article “ other Income “, it has to be established first that income stream does not fall in any other article of DTAA. Undisputedly, all the recipient are in the business of the services. Therefore there income first classify under article of Business income. In absence of permanent Establishment, it cannot be taxed in source country [India]. Therefore it goes out of the residuary article of ‘Other income’. Revenue could not point out that those entities income is not business income. Revenue also could not show that why those decisions do not apply to the facts of the case of the assessee wherein the identical jurisdiction and identical services are involved. Disallowance of contribution and reimbursement of expenses paid by the assessee to KPMG International cooperative, Switzerland without deduction of tax at source - HELD THAT:- As the coordinate bench in assessee’s own case for assessment year 2001 – 02 [2017 (4) TMI 869 - ITAT MUMBAI] has already held that contribution paid by the assessee to KPMG cooperative, Switzerland is covered by Mutuality concept i.e. mutual Association on its receipts would not constitute income chargeable to tax. The learned departmental representative could not controvert the above decision of the coordinate bench in assessee’s own case, therefore disallowance for non-deduction of tax at source is correctly deleted. Revenue appeal dismissed.
|