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TMI Blog2012 (8) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of 'fees for technical services' as per Explanation 2 to section 9(1)(vii) and, therefore, the assessee was liable to deduct TDS as per section 195. 2. Brief facts of the case as culled out from the order of the CIT(A) is that the assessee is a company engaged in the manufacturing of textiles and denim fabrics. For the year under consideration, the assessee has engaged "Emirates Advocates" for the purpose of registration of its certain trade mark application in UAE for a fee of US$ 41,555. The assessee was required to remit this amount, hence, it filed an application under Section 195 before the Assessing Officer on 15-12-2004 for issuance of No Objection Certificate. The Assessing Officer, however, held that such a payment was in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. It was also submitted that the Advocates merely carried out the work for registration of trade mark and such services can not be regarded as technical services. Reliance were also placed on CBDT circular No.23, dated 23-7-1969 and circular 786, dated 7-2-2000. Regarding Assessing Officer's observation that the "payees" are not entitled to the benefit of DTAA between India and UAE, since they are not tax resident of UAE as per article 4(1) of the DTAA, is without assigning of any reason as the Advocates are the persons residents in UAE within the meaning of article 4 of the Treaty. In support of this, a copy of the certificate from 'Emirates Advocates' about residency in UAE and about not having fixed base in India or not having any stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y services. He referred to provision of section 194J(1) that professional services and technical services have been treated to be separate, so this analogy should be read in section 9(1)(vii) also. Being a legal firm of UAE, the Advocates have rendered professional services and not consultancy services as stipulated under Section 9(1)(vii). He also relied upon the letter dated 1-7-2007 written by the 'Emirates Advocates' that they do not have any fix base in India and have been established/incorporated under the laws with the Department of Economic Development and further they carrying the business under the professional licence. In response to our query, at the time of hearing, whether any 'tax residency certificate' was produced, issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk to Advocates in Emirates were not in the nature of fees for technical services in view of the section 9(1)(vii) but was purely for professional services. Nowhere from the records it can be found as to what was the nature of services which were rendered by 'Emirates Advocates' to the assessee for which the payment of fees of US$ 41,555 was made. Merely stating that this was for the purpose of registration of trade-mark application and, therefore, it is in the nature of professional services, cannot be upheld. The exact nature of services has to be seen from the document. Even if the benefit has to be taken under Article 4 of the Indo UAE Treaty, then it is essential that 'tax residency certificate' issued by the competent authority of Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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