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2024 (1) TMI 1005 - AT - Income TaxTDS u/s 195 - disallowance u/s. 40(a)(i) for non deduction of TDS on payment to non-resident which is in nature of FTS(Fee for Technical Service) - beneficial provisions of India-Netherland DTAA - Scope of services the AO held that the nature of services contemplated under the Agreement was that of advisory and consultancy services which would be covered within the meaning of 'fee for technical services' ("FTS") both under the Income Tax Act as well as the treaty - CIT(A) deleted addition - HELD THAT:- CIT(A) held that the amount received by NTL Lemnis Holding BV for management and sales marketing support services as non-taxable in view of the beneficial provisions of India-Netherland tax treaty read with the MFN clause and the India Netherland treaty. It has also been submitted that since the subject matter income has been assessed to be non-taxable in the hands of the recipient, there is no question of deducting tax at source under section 195 by the remitter and disallowance under section 40(a)(i). Having heard the arguments of the ld. DR and the material on record, we hold that the MFN clause of India-Neitherland Tax Treaty has been rightly interpreted by the ld. CIT(A) and hence, we decline to interfere with order of the ld. CIT(A). Appeal of the Revenue is dismissed.
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