TMI Blog2012 (12) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of royalty or technical service but the same was in the nature of business profit and in the absence of any PE in India, it was not chargeable to tax in India following the decision in case of Yahoo India (P.) Ltd(2011 (6) TMI 162 - ITAT, MUMBAI). Appeal decide in favour of assessee - IT Appeal No. 4332 (Mum.) of 2009 - - - Dated:- 18-7-2012 - I.P. Bansal, P.M. Jagtap , JJ. P.J. Pardiwalla for the Appellant. M. Murali for the Respondent. ORDER P.M. Jagtap, Accountant Member This appeal filed by the assessee is directed against the order of Ld. CIT (A)- 9, Mumbai dated 02.06.2009. 2. Ground no.1 of this appeal involve the issue relating to disallowance of Rs. 1,09,35,108/- made by the A.O. and confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x at source was deducted by the assessee on the ground that the amount paid to Google Ireland Ltd. constituted business profits of the said company and since the said company did not have a permanent establishment (PE) in India, the amount paid was not chargeable to tax in India. According to the A.O., the services rendered by the Ireland company to the assessee company was in the nature of 'technical services' and hence the assessee company was liable to deduct the tax at source form the payment made against the said services. Since no such tax at source was deducted by the assessee, the deduction claimed by the assessee on account of expenditure incurred on payment of 'advertisement charges to M/s. Google Ireland Ltd. was disallowed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the payment made by the assessee to Google Ireland Ltd. for the services rendered was in the nature of 'royalty' chargeable to tax in India and the assessee therefore was liable to deduct the tax at source from the said payment. Since there was failure on the part of the assessee to deduct such tax, the Ld. CIT (A) confirmed the disallowance made by the A.O. u/s.40(a)(i) although on different ground. Aggrieved by the order of the Ld. CIT (A), the assessee has preferred this appeal before the Tribunal. 6. We have heard arguments of both the sides and also perused the relevant material on record. It is observed that a similar issue had come up for consideration before the Tribunal in the case of Yahoo India (P.) Ltd. v . Dy. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uploading and display of the banner advertisement of the Department of Tourism of India on its portal was not in the nature of royalty but the same was in the nature of business profit and in the absence of any PE of Yahoo Holdings (Hong Kong) Ltd. in India, it was not chargeable to tax in India. Assessee thus was not liable to deduct tax at source from the payment made to Yahoo Holdings (Hong Kong) Ltd. for such services and in our opinion, the payment so made cannot be disallowed by invoking the provisions of section 40(a) for non-deduction of tax. In that view of the matter we delete the disallowance made by the A.O. and confirmed by the learned CIT (A) u/s 40(a) and allow the appeal of the assessee." 7. As the issue involved in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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