TMI Blog2014 (2) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... entary agreements was with any mala fide intentions - Assessee is not liable to make such payment on such deduction of tax on said amount of remittance - Decided in favour of assessee. - ITA No. 2040/PN/2012 - - - Dated:- 29-10-2013 - Shri Shailendra Kumar Yadav And Shri R. K. Panda,JJ. For the Appellant : Shri R.D. Omkar For the Respondent : Shri Walimbe ORDER Per Shailendra Kumar Yadav, JM This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-IT/TP [(in short CIT(A)- IT/TP], Pune, dated 07-08-2012 for A.Y. 2010-11 on the following ground: 1. The learned CIT(A) erred in holding that the amount of 2,10,000/- remitted to GPN Engineering Process, France (GPN for short) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payment of consideration to GPN, France was agreed to be made on net of tax basis under Article 4.2.5 'Taxes' on Page 13 of the said agreement. The assessee has remitted an amount of 2,10,000 being 70% of the total 3,00,000 as stated towards consideration for said Process Book Package and paid tax Rs.15,20,644/- on 30-04-2009. 4. The stand of the assessee has been that amount remitted by it is not taxable to charge and requested to give refund of tax deducted and deposited by assessee. The Assessing Officer observed that out of total payment of 6,00,000, assessee paid 3,00,000 towards license fee, whereas remaining 3,00,000 were payable towards Basic Engineering Cost and Technical Assistance for detailed engineering as mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant erection and for guaranteeing plant process performance as well. Therefore, this agreement could not be considered as composite agreement along with purchase of plant. In view of above discussion, payment was to be categorized as 'fees for technical services' and 'consultancy services' u/s. 9(1)(vii). As in this case payment was taxable u/s. 9(1)(vii) as services were rendered in India. Accordingly, it was held that part payment is taxable and fee for technical and consultancy was under Income Tax Act and under relevant article of DTAA. It was also observed that assessee has not preferred an appeal against TDS made on payment of remaining 80,000 out of 3,00,000. Accordingly, it was held by CIT(A) that assessee has rightly deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n related to the supply of drawings, designs, and detailed engineering services for erection of plant for manufacture of licensed products. The Income-tax officer, TDS-2 Pune, however, considered the same as in the nature of royalty/technical fees and also observed that assessee's plea that "payment relates to the acquisition of technical know how for the purchase of machinery is not correct-----". On the contrary, the Commissioner of Income- tax (Appeals) has accepted the plea of the assessee. We have also perused the technical-cum-financial collaboration agreement dated 23.12.1991 and the supplementary agreements dated 8.4.1992 and 9.4.1992 and find that the stated remittance is part of a consideration for supply of technical know how for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such allegation, as is being made out by the learned Departmental Representative, is found in any of the orders of the authorities below. The learned Departmental Representative has not referred to any incriminating material or evidence to demonstrate that the bifurcation made out in the supplementary agreements was with any mala fide intentions. In view of the aforesaid and considering that the plea of the learned Departmental Representative is based on mere bald assertion, we do not find any merit in his plea and thus find no reasons to remit the matter back to the Commissioner of Income-tax (Appeals) for adjudication afresh." 6. Nothing contrary was brought to our knowledge on behalf of revenue with regard to decision of M/s. Royle Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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