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TMI Blog2012 (8) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order passed by the A.O. u/s 201 and 201(1A). The following grounds have been raised in this appeal:- "The following grounds of appeal are independent of, and strictly without prejudice to, one another:- Ground No.1 1. The Commissioner of Income Tax (Appeals) XXXIII, Mumbai [hereinafter referred to as "the CIT(A)"] erred in holding the payments of US$1,36,832.23 towards purchase of software product and payment of US$ 1,23,229.02 towards assisting in modification and implementation of software purchased herein referred to as product consultancy made to Apex Systems Pte. Ltd. (hereinafter referred to as "Apex") Singapore, as a royalty payment, requiring tax deduction at source @ 15%. 2. She further erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 towards Annual Maintenance Charges (AMC) for 32 PRO-IV users, (hereinafter referred to as "the said payments") as "Fees for Technical Services" under Article 12(4)(a) of the Indo-Singapore Treaty for Avoidance of Double Taxation, requiring tax deduction at source @ 15%. 2. She further erred in holding that :- * the services are related to the application or enjoyment of the intangible and the granting of right to use the intangible and hence ancillary and subsidiary to the application or enjoyment of the intangible for which Royalty is received and * they are in the nature of "Fees for Technical Services" under Article 12(4)(a) of the Indo-Singapore Treaty for Avoidance of Double Taxation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red section 9(1)(vi) of the Income-tax Act, 1961 and came to the conclusion that the payments so made were in the nature of royalty covered u/s 9(1)(vi). The contention of the assessee that the amount was received by M/s.Apex Systems Pte. Ltd. in the nature of 'Business profits' and in the absence of any PE, no amount could be charged to tax, was not accepted. Thereafter the A.O. also examined Article 12 of DTAA between India and Singapore and came to the conclusion that the entire amount paid by the assessee fell within the ambit of this Article as well. He, therefore, held that the amount paid by the assessee was taxable in the hands of the non-resident both u/s 9(1)(vi) of the Act and also Article 12 of the DTAA with Singapore. 4. Not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charge is not attracted, there can be no question of any deduction of tax at source or treating the assessee as in default. If however, the amount in question is found to be falling with the purview of section 9, in that case the consideration of the provisions of DTAA is required. Say, if the amount is chargeable to tax in view of section 9, but the DTAA does not provide for any taxability, still the taxability will fail. It is only if the amount is chargeable to tax as per the Act and further it is taxable as per the DTAA also, that the liability to tax shall be magnetized. From the above discussion if follows that the decision on the taxability of the amount under the provisions of the Act is sine qua non. That is why in the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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