1996 (12) TMI 132

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....th M/s. ESW, Austria, which was duly approved by the Government of India and R.B.I. In terms of Article 13.1 of the Agreement M/s. TAYO, i.e., the assessee was required to remit by way of lump sum technical know-how fees of DM 20,00,000 in three instalments. In this connection the assessee submitted Application dated 9-12-1991 under section 195(2) of the I.T. Act for grant of permission for remittance of the amount to M/s. E.S.W., Austria, without deduction of tax at source. 3. The Assessing Officer vide his Intimation dated 23-12-1991 and I st July, 1992 asked the assessee to deduct taxes on the instalments of the payment being made to M/s. ESW, Austria. He observed that the payments to M/s. ESW, Austria, were fees for technical service....

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....or which this amount is to be paid to ESW." 4. Aggrieved, the assessee went up in appeal before the ld. CIT(A),who held that no deduction of tax was called for in the case in view of the provisions of Double Taxation Agreement (D.T.A.) between India and Austria. 5. Aggrieved, the Revenue has conic up in appeal before this Tribunal. 6. The Id. Senior Departmental Representative (D.R.) submitted before us that the order of the Id. CIT(A) was wrong inasmuch as tax at source was deductible from the fees of the technical services payable to M/s. ESW, Austria. He reiterated the aforesaid grounds given in the order of the Assessing Officer. 7. The Id. counsel for the assessee, on the other hand, supported the order of the Id. CIT(A). H....

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....ices rendered in India only were taxable in India. The salaries for services rendered in France were not taxable in India. He rounded up his arguments by submitting that the ld. DCIT was not justified in refusing to grant No Objection Certificate (N.O.C.) for remitting the amount of technical know-how fees to M/s. ESW, Austria, and the ld. CIT(A) was justified in holding that no deduction of tax at source was called for in the case. 8. We have carefully considered the facts and circumstances of the case and the submissions and contentions of the rival parties. We are in agreement with the ld. CIT(A) that the amounts in question payable to M/s. ESW, Austria, were not subject to taxation in India and no deduction of tax at source was calle....