9911796707
TMI Blog2025 (1) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessment order passed u/s. 143(3) of the Income-tax Act, 1961 (the Act) dated 22.3.2021 by the National e-Assessment Centre, Delhi [ld. AO] was dismissed. 2. The assessee has raised the following grounds of appeal:- "1. That the order of the Learned Commissioner of Income Tax (Appeals) in so far it is prejudicial to the interests of the Appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned lower authorities erred in law and on facts, in not giving an opportunity for personal hearing via video conference inspite of requesting the same, which is against the principle of natural justice 3. That the learned CIT(A) erred in law and facts in confirming the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies erred in law and on facts in holding that the services rendered by the M/s Tavelon are in the nature of services of technical or other personnel and such facts are perverse and not connected with the facts of the case. 11. That the learned CIT(A) erred in law and on facts in holding that the services rendered by the appellant do not fall under the exclusion provided under Article 12(5) of Indo-US DTAA and therefore, the services are technical in nature. 12. That the learned CIT(A) erred in law and on facts in uploading the recommendation of the learned assessing officer for initiation of proceedings u/s 201(1) of Act in the assessment order u/s 143(3) of the Act." 3. The brief facts of the case show that assessee is carrying on bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocess and same cannot be taxed in India. The ld. AO held that the same falls into definition of fees for technical services chargeable to tax as per Income tax Act and therefore tax was required to be deducted at source. Therefore it was held that assessee is liable to deduct tax at source on payment of Rs. 540,96,815 to Tavelon LLC as it is in the nature of fees for technical services and failure to do so resulted into disallowance u/s. 40(a)(i) in the assessment order dated 22.32.2021 wherein total income was determined at Rs. 17,55,54,145. 5. The assessee preferred appeal before the ld. CIT(A) wherein vide para 4.3 contention of the assessee was recorded. The ld. CIT(A) rejected the contention of the assessee that income earned by Tave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r personnel. Therefore, the services provided by Tavelon, USA cannot be considered as fees for included services in terms of Article 12(4) of the DTAA. Therefore, according to the ld. AR, the above income is not chargeable to tax in the hands of Tavelon, USA in India, therefore no tax is required to be deducted at source u/s. 195 of the Act. 7. The ld. AR also submitted a paperbook containing 46 pages wherein the agreement with above entity dated 28.4.2016 along with typed copy of agreement was placed as the ld. AO has determined the issue only on the basis of illegible agreement, copies of invoices and declaration from Tavelon LLC that they do not have any permanent establishment in India. He submits that as without looking at the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate of the recipient of income i.e. Tavelon LLC USA. The claim of assessee is that it is a business income of Tavelon LLC in India which is chargeable to tax only in the state of residence of Tavelon LLC in USA as Tavelon LLC does not have any PE in India in terms of Article 5 & 7 of India-US DTAA. The contention of the assessee is also that the above services does not fall into definition of fees for included services under Article 12(4) of the DTAA and the services received by the assessee are not chargeable to tax in India. Even otherwise under Article 12(4) for the reason that it does not 'make available' knowledge to the assessee. It was further stated that for AY 2017-18 identical services was considered by the ld. AO as sales & mar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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