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2021 (12) TMI 100 - ITAT BANGALOREIncome taxable in India - payments made to the law firm in Poland -nature of Fee for technical services under section 9(1) (vii) of the Act as well as Article 13 of India Poland DTAA - Criteria for Entities to be considered a tax resident - eligibility of Exception to section 9(1)(vi)(b) / 9(1)(vii)(b) - Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State - Whether the Partnership firm was not eligible for benefit under India Poland DTAA, on the ground that assessee was a fiscally transparent entity not liable to tax in Poland in its own right and Whether the Partners are fully taxable in respect of their shares of income in Partnership Firm as per CIT? - HELD THAT:- Only on fulfillment of either of the two circumstances under Article 15, one could say that the money received by the non resident is taxable in India. Due to non fulfillment of above conditions, taxability under Article 15 does not trigger. In the present case the nonresident payee has given a certificate that there is no fixed place of business/PE in India, more particularly placed at page 40-41 of paperbook. Nothing has been brought on record by the revenue to establish that the non resident payee has any fixed place of business PE in India. In that view of the matter, the income ceases to be taxable in India. - Decided in favour of assessee. Entitled to interest on refund of tax deposited u/s 195 - Hon’ble Supreme Court in case of UOI vs Tata Chemicals Ltd. [2014 (3) TMI 610 - SUPREME COURT] held that, deductee is entitled for interest on refund tax deposited under section 195. The Ld..AR placed reliance on CBDT Circular No.11/2016 allowing interest on refund under section 244A on excess TDS deposited under section 195 of the Act. Nothing contrary has been brought on record by the Ld.CIT DR. Respectfully following the decision of Hon’ble Supreme Court, we hold that the deductee is entitled to interest on refund of tax deposited under section 195 of the Act. Taxability of payment made by assessee in India to the non residents - payee is a non resident and assessee filed application under section 248 seeking declaration that payments made to Zintro is not taxable in India - HELD THAT:- We find the issue to be decided in the grounds raised by the assessee are in relation to taxability of payment made by assessee in India to the non residents. The decision of Hon'ble Karnataka High Court in the case of Samsung Electronics Co. Ltd. [2011 (10) TMI 195 - KARNATAKA HIGH COURT] on the basis of which the revenue authorities concluded that the payment to non-residents are in the nature of royalty and FTS, now stand overruled by the decision of the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd [2021 (3) TMI 138 - SUPREME COURT]and therefore in all fairness, the issue is to be remanded to the Ld.CIT(A) to examine the terms of the agreement under which services were rendered to the Assessee. The Ld.CIT(A) is directed to analyse in the light of the provisions of the DTAA and principles laid down by Hon’ble Supreme Court, as to whether the same would amount to Royalty and FTS. We accordingly remand the issue to the Ld.CIT(A). The Ld.CIT(A) will afford opportunity of being heard to the Assessee in the set aside proceedings.
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