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TMI Blog2025 (5) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2017-18 declaring total income of Rs. 4,84,79,780/-. The case was selected for scrutiny through CASS for complete scrutiny on the issues mentioned therein and notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee through email. In response to the above notices, the assessee uploaded the submissions through online portal. Assessee is engaged in the business of providing a range of business process outsourcing services and investment advisory services. After considering the details submitted by the assessee, the Assessing Officer observed that assessee has made payments to foreign entities, namely, Dash Enterprise and Accelerated Data Systems (ADS) and found that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing income from a source outside India and hence, the exclusions provided in section 9(1)(vii)(b) and Article 12(3)(g) of India Australia DTAA would apply. After considering the above, he held that the services provided by them are covered under the scope of managerial services and accordingly, sustained the additions made by the AO. He also rejected the plea of the assessee on the disallowance made u/s 40(a)(i) does not fall under any clauses of Explanation 1 to section 115JB of the Act, hence, it cannot be added to the book profit. 4. Aggrieved with the above order, the assessee is in appeal before us raising following grounds of appeal: "1. That on the facts and circumstances of the case and in law, the order dated 31.03.2024 passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the CIT(A) erred on facts and in law in confirming levy of interest under section 234C of the Act. " 5. At the time of hearing Ld AR of the assessee submitted as under :- "At the outset, kind attention is invited to the services provided by Dash Enterprises to the Appellant (refer page 43 of merits paper book): - Post box, receive, sort, scan & email correspondence; - Download/ decrypt client databases daily; - Set up, supply 80gsm A4 stock, envelopes & Laser Print Simplex @ 600DPI page personalised letter; - Set up & fold A4 letters to DL; - Set up & insert folded letters into DL envelope seal & sort; - Receiving, handling & lodgement to Australia Post daily; and - Advise of returned mail. * Taxability under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9(1)(vii) of the Act and therefore, there was no obligation on the Appellant to deduct tax at source qua such payments. * Taxability under the DTAA Dash Enterprises is a company resident of Australia; taxability of receipts in the hands of the non-resident company has to examined in the light of the provisions of the DTAA, to the extent more beneficial to the taxpayer [refer section 90(2) of the Act]. In this regard, it is submitted at the outset that the CIT(A) has grossly erred in holding that the provisions of the Act or the DTAA, whichever are more beneficial to the Revenue, have to be applied to determine taxability of the non-resident. The said finding, it is submitted, is in the teeth of section 90(2) of the Act and cannot be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determined under sections 4, 5 and 9 of the Act read with the provisions of the India-Australia DTAA and accordingly, corresponding liability to deduct tax at source will be determined in the hands of the Appellant. It is submitted that services provided by Dash Enterprises were in the nature of clerical/support services, such as helping the Appellant communicate with the customers (through letters, correspondences, etc.) in order to collect money due to them. In terms of Article 12(3)(g) of the DTAA, the services provided by Dash Enterprises as debt collection agent did not make available technical knowledge, experience, skill, know-how or processes to the Appellant, inasmuch as there was no transfer of technical knowledge, skills, kno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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