TMI Blog2018 (10) TMI 2024X X X X Extracts X X X X X X X X Extracts X X X X ..... for technical services under the treaty between India and Belgium includes services of managerial nature, having regard to the MFN clause in the India-Belgium Treaty, the restrictive definition of the term fee for technical services in the India-UK Treaty can be applied and by following various decisions as referred hereinabove, CIT(A) held that the payment made to SG Exprover cannot be considered to partake of the nature of fees for technical services and allowed the ground raised by the assessee without obtaining any comments from the AO. We direct the Assessing Officer to examine the MFN clause available in the Protocol of Indo-Belgium DTAA as to whether the same shall override the specific provisions laid down under Article 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under section 40(a)(i) of the Income Tax Act, 1961 [ Act in short] and failed to observe that as per the Indo Belgium DTAA Article 12, the payment related to the managerial services was categorized as fees for technical services and was taxable in the other contracting state. 2. Brief facts of the case are that the assessment under section 143(3) r.w.s. 144C(13) of the Act was completed on 19.10.2011, wherein, due to additions/disallowances made on certain issues, the Assessing Officer determined the loss at ₹.23,52,67,331/- and taxable book profit under section 115JB of the Act was determined at ₹.47,78,83,022/-. Subsequently, the assessment order was subjected to revision under section 263 of the Act dated 28.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made to SG Exprover cannot be considered to partake of the nature of fees for technical services and allowed the ground raised by the assessee. 4. Aggrieved, the Revenue is in appeal before the Tribunal. By relying on the grounds of appeal, the ld. DR submitted that as per Indo Belgium DTAAArticle 12, the payment related to the managerial services was categorized as fees for technical services and liable for taxation in the other contracting state. Thus, the ld. DR pleaded that the order of the ld. CIT(A) should be reversed. On the other hand, the ld. Counsel for the assessee strongly supported the order passed by the ld. CIT(A) on this issue. 5. We have heard both sides, perused the materials available on record and gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical or other personnel . Since the above said payments have been considered as the payment made for the purpose of managing the sales affairs, the payment made to the company situated in Belgium is liable for taxation specifically only in India as per Article 12 of the Indo - Belgium DTAA. The ld. CIT(A) was also of the same opinion as stated above. The assessee has alternatively claimed that the payment made to SG Exprover is not taxable in terms of the tax treaty. Though the ld. CIT(A) noted that the definition of the term fees for technical services under the treaty between India and Belgium includes service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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