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2018 (5) TMI 808 - DELHI HIGH COURTIncome accrued in India - technical service charges payable to the foreign company in Germany constitute - Fees for technical services - whether constitutes business profit of the foreign company and that the same was not taxable in India? - PE in India - Indo German DTAA - Held that:- In the facts of the present case in terms of the DTAA, payments made to Lufthansa may not be liable to tax in India in terms of Article III of the DTAA, yet their taxability in terms of Article VIIIA of the DTAA, as there exists a ‘Fee for Technical Services’ clause in the Agreement, was not examined in proper perspective. In the present case, the issue of technical fee has to be examined from the point of view of Article VIIIA introduced by the amending protocol, which to the extent it is relevant In the absence of the agreements and a fuller discussion by the ITAT which seems to have decided only on the applicability of the AAR’s ruling in Tehniskil (Sendirian)[1996 (4) TMI 491 - AUTHORITY FOR ADVANCE RULINGS], this Court is of opinion that the appeals need to be reconsidered and specific findings rendered in the context of Section 9 (1) (vii) and provisions of the DTAA. The appeals are allowed to the extent that the impugned orders are set aside; the issue is restored to the file of the ITAT which shall now proceed to hear the cases and render its findings in the light of the provisions of DTAA and the other provisions of the Act, in accordance with law. ITAT’s final order shall be made within six months. The questions of law are answered accordingly.
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