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34. We have considered the rival submissions on either side and perused the relevant material available on record. The assessee- company claims to have received management service fee of `4.35 Crores each from CMT and TCM. However, it appears the assessee could not provide the details of specific services provided to those entities. The assessee claims that the details were made available before the TPO and they are available before the CIT(Appeals) and before this Tribunal. It is not in dispute that the assessee-company assumed a profit of 15% on the revenue in the form of management service fee. The assessee further claimed before the CIT(Appeals) that the TPO arbitrarily estimated the fee at `8.70 Crores instead of `4.35 Crores. The assessee appears to have adopted cost plus method for computing arm's length price in respect of management consultancy charges. From the tabular ITA No.1020,1665 & 1386/Mds/10 column available at page 69 of the order of the CIT(Appeals), it appears the business size of CMT is almost twice that of TCM. Moreover, in terms of property, plant, equipment, value of the asset, CMT is almost eight times bigger than that of TCM. Therefore, the Transfer Pricing Officer assumed that the assessee-company should have received double the amount towards management consultancy fee from TCM and CMT.

79. The next ground of appeal is with regard to management consultancy fee disallowed to the extent of `13,38,30,000/- under Section 40(a)(i) of the Act for non-deduction of tax at source.

80. Shri G. Baskar, the Ld.counsel for the assessee submitted that in respect of management consultancy fee of USD 3 million ITA No.1020,1665 & 1386/Mds/10 which is equivalent to `13,38,30,000/- paid to the holding company, namely, Vedanta Resource Plc, the assessee is not required to deduct tax at all. The management consultancy fee is not taxable in India, therefore, the CIT(Appeals) is not justified in disallowing the claim of the assessee.

81. On the contrary, Shri M. Swaminathan, Ld. Sr. Standing Counsel submitted that the assessee has paid USD 3 million towards management consultancy service and also paid USD 2 million as Representative Office fees. Both the payments were admittedly made to Vedanta Resources Plc, a body corporate incorporated in England and Wales. In respect of Representative Office fees, the CIT(Appeals) himself found that the said fees is not chargeable to tax in India. Accordingly, it was found that no TDS is required to be made. However, in respect of management consultancy fees, the CIT(Appeals) found that Vedanta Resources Plc, UK company agreed to provide services. Referring to Article 13 of Double Taxation Avoidance Agreement between India and UK, it was found that the foreign company has deputed the skilled employees to India and the assessee-company availed their services. Therefore, the CIT(Appeals) found that the assessee-

83. Coming to management consultancy fees, the CIT(Appeals) found that the UK company rendered service in India, after deputing their employees in India. Therefore, the CIT(Appeals) found that the utilization of service was in India, hence the transaction has to be construed as technical services both in terms of Article 13 of ITA No.1020,1665 & 1386/Mds/10 Double Taxation Avoidance Agreement between India and UK and in terms of Section 9(1)(vii) of the Act. Accordingly, the CIT(Appeals) confirmed the order of the Assessing Officer. It is not in dispute that UK company deputed their skilled employees to India to render services to the assessee. In fact, the assessee-company availed services of UK company in India. Therefore, the payment made to the assessee towards management consultancy fees is liable to tax in India. Hence the assessee has to necessarily deduct tax as mandated under Section 9(1)(vii) of the in respect of the payment of management consultancy fees. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.