TMI Blog2014 (7) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... IA ) reversed this proposition of Hon'ble Karnataka High Court (supra). Thus, in our considered view, the advertisement payment made to NRI cannot be held as liable to TDS. We further hold that there is no element of rendering any managerial, technical or consultancy services so as to be termed as fees for technical services. - Decided in favour of assessee. - ITA Nos. 42, 43, 44, 45 & 46/JP/2012 - - - Dated:- 18-7-2014 - T. R. Meena (Accountant Member) And R. P. Tolani (Judicial Member) For the Petitioner : A. K. Khandelwal D. C. Sharma For the Respondent : P. C. Parwal ORDER R. P. Tolani (Judicial Member) These are five appeals filed by the Revenue against common order of the ld. CIT(A)-II, Jaipur dated 21-10- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Finance Act, 2010, it was stated that even if the non-resident had no rendered any services in India and received any income by way of interest royalty and fees for technical services, the income shall be deemed to accrue and arise in India. This explanation was inserted with retrospective effect from 1976. (ii) The Circular N. 23 dated 23rd July, 1969 relied upon by the assessee clarified the provisions of Section 9 prior to the amendment by the Finance Act 1976, therefore, it did not apply in the case of the assessee. (iii) The remittance made by the assessee on account of advertising were covered under the expression fees for technical services as defined in Section 9(1)(ii)(b) of the I.T. Act, 19761 and these services had been u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act i.e. fees for technical services. To support its contention, the assessee relied on the following judgements. (i) M/s. GE India Technology Centre (P) Ltd. vs. CIT Anr. 44 DTR 201 (SC). (ii) Income Tax Officer (International Taxation) vs. Prasad Production Ltd. (37 DTR 418) Chennai (Special Bench). (iii) ACIT vs. Modern Insulator Ltd. , 10 ITR (Tribunal) 147, Jaipur ITAT . (iv) Sun Microsystems India (P) Ltd. vs. ITO , 3 ITR (Trib) 808), Banglore 2.3 The ld. CIT(A) after considering the submissions of both the parties held that the assessee was not liable for TDS as the amounts were not paid by the assessee to M/s. BNP Media, USA for any technical services and the payments made for advertisement cannot be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislature introduced the Explanation to section 9(2) of the Act after this judgment, with retrospective effect from June 1, 1976 in the Finance Act, 2007. Despite this introduction of explanation to section 9(2) of the Act, the Karnataka High Court in the case of Jindal Thermal Power Co. Ltd. Vs Deputy CIT (321 ITR 31) held that the law laid down by the Apex Court in the case of Ishikawajima Harima Heavy Industries Ltd. (288 ITR 408) still holds good despite the retrospective amendment to section 9 of the Act. Therefore, the requirement of services of the non resident being rendered in India and being utilized in India is still valid, despite the judgment of the Karnataka High Court in the case of Samsung Electronics Co. Ltd. (320 ITR 209) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld the assessee's contention. The Hon'ble Karnataka High Court judgement came up for consideration before Hon'ble Supreme Court in the case of M/s. GE India Technology Centre (P) Ltd. vs. CIT Anr. 44 DTR 201 (SC). By this judgement, the Hon'ble Supreme Court reversed the judgement of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Co. Ltd. (supra). Thus the proposition as laid down by the Hon'ble Karnataka High Court in this case is no more law of land. Therefore, the entire edifice of ADIT (International Taxation) action in holding the advertisement as fees for technical services which is liable for TDS u/s 9(1)(vii)(b) read with TDS provisions does not survive any more. Therefore, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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