TMI Blog2020 (3) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... versed and expert in their fields. M/s. Korea Search after matching requirement of the client with the job profile of the candidate refers it to the client after charging fees as agreed. Whether the candidate who is referred by M/s Korea Search, is technical expert or not in the particular field is on the sole discretion of the assessee company who interview and test the candidate and appoints as an employee for the period and conditions to be decided or it requests for replacement. As far as Section 9(1)(vii) Explanation 2 provides that 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 . After examining the agreement, nature of services provided by M/s. Korea Search to the assessee and the provisions of Section 9(1)(vii) we are of the considered view that the services taken by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Chapter XVII of the Income Tax Act, 1961 and it is an assessee-deductor for the purpose of tax deductible at source and payable to Central Govt. account under the Act. The Ld. A.O issued letter dated 6.5.2015 to assessee for verification of payments made to Non Residents during Financial Year 2014-15 and 2015-16 without deducting tax at source u/s 195 of the Act. For Financial Year 2015-16 relevant to Assessment Year 2016-17 Ld. A.O observed that the assessee company in order to search engineer for new product development contacted Head Hunting Concern located in South Korea with the name M/s Korea Search and agreement was entered with this Korean concern for supply of engineers as per job description which will be employed by the assessee company. For this work assessee remitted ₹ 1,31,670/- and ₹ 4,70,304/- on 21.09.2015 and 24.12.2015 respectively to M/s. Korea Search, South Korea. No tax was deducted u/s 195 of the Act on these payment. The remittances was made after obtaining a certificate on form No. 15CB from a Chartered Accountant. The assessee when show caused submitted that the alleged payment is made to the Non Resident having no permanent establishment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 6,01,974/- during the financial year 2015-16. Assessee did not deduct tax at source u/s 195 of the Act and obtained certificate from Chartered Accountant in Form No.15CB of the I.T. rules. When the matter was examined by the Ld. A.O he was of the view that the alleged services are technical services in nature and falls under the provisions of Section 9(1)(vii) of the Act and thus liable for deduction of tax at source u/s 195 of the Act and accordingly treated the assessee in default. 10. Now we have to examine the type of services rendered by M/s. Korea Search to the assessee company. For this we need to go through the agreement and the terms and conditions mentioned therein. In the paper book dated 8.7.2019 copy of agreement is placed at page 8 9. In this agreement the clients responsibility, guarantee, terms of payment and placement fee for contingency base searches are mentioned and the same is reproduced below:- Article 3. (Client's responsibility) The Client will provide a detailed job description of the required position. The Client will provide feedback to Korea Search within 5 working days upon receipt of-the candidate's profile. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of April, 1976, and approved by the Central Government. Explanation 1. =For the purposes of the foregoing proviso, an agreement made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date. 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 . 12. Now we examine the type of services. Detailed job description is provided by the assessee company to M/s. Korea Search which has a data base of profiles of various eligible candidates. After examining the profile and matching it with the clients job description candidates are referred to the assessee company with guarantee that if the candida ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
