TMI Blog2005 (2) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... to adjudicate in this appeal is whether or not the CIT(A) was justified in holding that the assessee had an obligation to deduct tax at source under section 195 in respect of payment of US $ 72,000 made to M/s. Standard Poor (Australia) (P.) Ltd, (hereinafter referred to as S P) for corporate credit rating of the appellant-company. 2. We have heard the rival contentions, perused the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax due on such income, as is being remitted or credited by that person to the nonresident, at the time of remittance or credit. The tax deduction at source liability, being a vicarious liability in nature, however is entirely dependent on the taxability in the hands of the recipient of income. It is, therefore, necessary to examine the taxability of impugned payments in the hands of S P, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue, therefore, requiring our adjudication is whether payment for credit rating can be considered to be a payment for the supply of scientific, technical, industrial, or commercial knowledge or information. 5. The payment for credit rating, in our considered view, is a payment for professional services. Credit rating is a specialized profession, and S P are well known all over the globe for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cannot be treated as a payment for the supply of scientific, technical, industrial, or commercial knowledge or information. It is not a payment for any knowledge or information but a payment for the professional services rendered which is to decide credit rating of a company. It follows that these services can only be taxed in India when the company rendering services has a permanent establishme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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