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Showing contexts for: 327 ITR 456 in Turbo Energy Limited, Chennai vs Dcit, Chennai on 3 May, 2017Matching Fragments
the nature of Managerial services as per Explanation-2 of Sec.9(1)(vii) of IT Act and held the payment as fee for technical services which attracts the TDS provisions of Sec.195 of IT Act and the assessee required to deduct the tax at source. Since the assessee failed to deduct the tax at source, the AO has brought the payments made to the non-resident agent to tax u/s.40(a)(i) of IT Act.
7.3 The Ld.CIT(A) allowed the assessee's appeal with an observation that the scope of the work undertaken by the non-resident agent is to canvass the exports of the assessee outside India, and not in the nature of Managerial services to apply the provisions of Sec.9(1)(vii) of IT Act. The Ld.CIT(A) relied on the decision of the Hon'ble Supreme Court in the case of GE Technological Centre Pvt. Ltd. v. CIT 327 ITR 456.
• Brakes India Ltd. V. DCIT (LTU) (266/Mds/2012) (Chennai) • Sun Micro Systems India (P) Ltd (125 ITD 196) (Bang) • G.E. Technology Centre Pvt. Ltd., Vs. CIT (327 ITR 456) 8.2 We heard the rival submissions and perused the material placed on record.
The assessee has produced the copy of the agreement before the Ld.CIT(A). The Ld.CIT(A) examined the Explanation of the assessee and the document placed before the CIT and concluded that the services rendered by the non-resident do not fall under the category of technical or managerial services. Ld.CIT(A) further stated that the services are ITA Nos.316 & 317/Mds/2014 ITA Nos.203, 204 & 205/Mds/2014 :- 23 -:
rendered outside India and there is no permanent establishment or business connection to the non-resident in India. This fact has not been disputed by the Revenue. The profits of the services rendered outside India cannot be taxed in India unless the non-resident has permanent establishment/or business connection in India as envisaged in Sec.9(1) of IT Act. The Ld.CIT(A) deleted the addition relying on the decision of the Hon'ble Apex Court in the case of GE Technological Centre Pvt. Ltd. v. CIT 327 ITR 456. The findings and conclusions arrived in earlier ground in respect of payment made to M/s.Biggleswade Ltd., are squarely applicable to this ground also. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. The Revenue's appeal on this issue for the A.Ys 2007-08, 2008-09 and A.Y 2009-10 are dismissed.