TMI Blog2019 (1) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(1)(vii) of the Act, and hence the income embedded in the testing fees is taxable in India - income accrued in India - India- Swiss DTAA - Held that:- The taxability under the tax treaty provisions clearly fail to bring the testing fees paid to a Swiss entity within the ambit of its income chargeable to tax in India. As for the connotations of 'make available' clause in the treaty, this issue is no longer res integra as relying on case of DIT v. Guy Carpenter & Co Ltd. [2012 (5) TMI 31 - DELHI HIGH COURT] and CIT v. De Beers India (P.) Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT]] in favour of the assessee. The assessee did not have any tax withholding obligations from payments made to the Swiss entity in respect of the testing fees. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee by Hon ble jurisdictional High Court s judgment in the case of CIT Vs Gujarat State Road Transport Corporation (366 ITR 170). We, therefore, decline to interfere in the findings of the CIT(A), which are in consonance with the law so laid down by Their Lordships, on this aspect of the matter. 5. Ground no. 2 is, accordingly, dismissed. 6. In ground no. 3, the assessee is aggrieved of the disallowance of ₹ 1,67,090 on account of testing expenses. 7. The relevant material facts are like this. The assessee has made payment aggregating to ₹ 1,67,090 to Testex AG, a Zurich (Switzerland) based entity. The assessee, a textile exporter, needed this testing so as to get Oeko tex certification which is quality parameter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. India Canada DTAA dated 11th January 1996, the make available clause has application in the context of fees for technical services. Under this clause, the fees for technical services For purposes of this Indo Swiss tax treaty, therefore, fees for technical services means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services :(a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described is taxable in the source country; or (b) make available technical knowledge, experience, skill, know-how or processes, or consist o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with it as follows: '......The technical or consultancy service rendered should be of such a nature that it makes available to the recipient technical knowledge, know-how and the like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words, to fit into the terminology making available , the technical knowledge, skill?, etc., must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... car running expenses as claimed by the assessee. 13. So far as this grievance of the assessee is concerned, the relevant material facts are like this. The short reason for which the CIT(A) has sustained this disallowance out of Motor Car Expenses is that the partial use of cars by directors for personal use cannot be ruled out . The assessee is aggrieved and is in appeal before us. 14. Having heard the rival contentions and having perused the material on record, we are of the considered view that this disallowance deserves to be deleted not only for the reason that it is based purely on surmises and conjectures, but also because the assessee being a juridical person, even if there is some element of personal use of car by the direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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