TMI Blog2015 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to demonstrate the actual amount incurred on behalf of the associated enterprises on the basis of entries passed in the books of account and supporting bills/vouchers of such expenses. In the absence of agreement, it cannot be inferred as to whether the invoice raised by the assessee was on account of reimbursement merely or otherwise. We also found that the AO has not given any finding to the effect that it does not partake the nature and character of included services as defined in DTAA on the concept of Article 13(4)(c) of DTAA between Indian and UK. Accordingly, we set aside both the orders of lower authorities and matter is restored back to the file of AO for deciding afresh in terms of our above observations. - Decided in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged by the foreign company to the applicant company in providing the services was the case Quid Pro Quo for the services and not reimbursement of expenses and, therefore, the payment of fees be made by the Indian company only after withholding tax u/s.195. The AO also relied in the case of Steffen, Robertson and Kirsten Consulting Engineers Scientist 230 ITR 206 (AAR) wherein it was held that there was no difference between fees for engineering services and the fees relatable to living allowance or travelling charges of the employees who had rendered the services. The AO also cited decision in the case of Cochin Refineries Ltd. 222 ITR 354 (Ker) wherein it was held that the services rendered by the foreign company are technical in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 of JPPB; DCIT v. INDIA INDEX DATED 13.11.2013 (BOM)- page 43 of JPPB; C. U. INSPECTION v. DCIT DATED 06.03.2013 (BOM)- page 49 of JPPB; UTILITY v. ACIT DATED 19.04.2010 (BOM)-page 59 of JPPB; ACIT v KARMA DATED 07.09.2012-page 66, 106, 107 of JPPB; DCIT v. AT AND S INDIA (KOL) DATED 29.01.2015 following CIT v. TEJAJI FARASRAM 67 ITR 95 (SC)-page 114, 123, 127 of JPPB; GE TECHNOLOGY v. CIT 327 ITR 456 SC). 6. As an alternate, ld. AR argued that even assuming while denying, there it is technical service fee under the Income Tax Act, 1961 [Act], it does not partake the nature and character of included services as defined in DTAA under make available concept of Article 13(4)(c) of DTAA between India and UK as propagated in CIT v. DE BE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by Foseco International Ltd. 9. On the other hand, the contention of ld. DR was that the assessee has not filed copy of the agreement for providing lotus note book services between assessee and its Indian company before the AO nor before the CIT(A). He further invited our attention to the invoice issued by the assessee which indicated sales and not the reimbursement of the expenses. 10. We have considered rival contentions, carefully gone through the orders of the authorities below and found that assesse s claim of reimbursement of expenses was treated by AO as fees for technical services, whereas the contention of the assessee was that it was merely a reimbursement of expenses incurred on lotus note book and various expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per explanation 2 to section 9(1) (vii) of the Act which reads as follows: Explanation [2]: For the purposes of this clause, ''fees for technical services means any consideration (Including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (Including the provision of services of technical or other personnel) but does not include consideration for any construction. assembly. mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries . In M/s Danfoss Industries (P) Ltd In RE (268 ITR 1) (AAR) it was held that the fees charged by the foreign company to the applicant company is providing the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of agreement, it cannot be inferred as to whether the invoice raised by the assessee was on account of reimbursement merely or otherwise. We also found that the AO has not given any finding to the effect that it does not partake the nature and character of included services as defined in DTAA on the concept of Article 13(4)(c) of DTAA between Indian and UK. Accordingly, we set aside both the orders of lower authorities and matter is restored back to the file of AO for deciding afresh in terms of our above observations. 12. As the issue involved in all the three years are exactly same, we, therefore, restore all these appeals to the file of AO for deciding afresh in terms indicated hereinabove. 13. In the result, all appeals of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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