TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether activation charges paid for embedded software features in supplied communication equipment were chargeable as fees for technical services, and whether tax was deductible at source on such payments.
Analysis: The activation charges were held to form part of the composite supply of equipment and standard software, with no basis to treat the subsequent activation as a separate technical service transaction. The nature of the charges was supported by the billing pattern and by the absence of any feature suggesting a distinct service element. Applying section 9(1)(vii) of the Income-tax Act, 1961 and Article 12 of the India-Ireland DTAA, the Tribunal followed its earlier decision in the assessee's own case and treated the payment as consideration for sale of a standard product rather than as fees for technical services.
Conclusion: The activation charges were not fees for technical services, and the assessee was not liable to deduct tax at source on those payments.
Ratio Decidendi: Where activation charges are inseparable from the supply of standard equipment and embedded software, and no independent technical service is rendered, the payment is not taxable as fees for technical services for TDS purposes.
TaxTMI 
