2014 (2) TMI 933

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....rance (GPN for short) towards part of the total lump sum price of EUR 3,00,000/- on net of tax basis for acquisition of Process Design Documentation called Basic Engineering Package on outright purchase basis for Ammonium Nitrate Prill Production pursuant to the agreement entered into with GPN was fees for technical services and therefore liable to withholding tax in India. Your appellant after having borne the tax and paid to the credit of the Central Government denies its liability to deduct tax on the said amount. It is prayed that the appellant be declared to be not liable to make such deduction of tax on the said amount of remittance and the tax paid by it be directed to be refunded to it. 2. The assessee is a domestic company engag....

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....ce for detailed engineering as mentioned in article 4.1.2.B of said agreement. The GPN, France has provided Process Engineering and Technical Supervisory and assistance services. The assistance services as described in Article 2 are technical assistance for detailed engineering assistance for erection and mechanical completion, the assistance for start up team and performance guarantee and personnel training. Further, it was observed assessee has not purchased from plant GPN, France. The assessee was to erect and commission Ammonium Nitrate Prill plant using technical assistance for erection for assembling and performance of the plant. The payment of EUR 6,00,000 is in two components EUR 3,00,000 for license fee and EUR 3,00,000 for basic e....

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....ld by CIT(A) that assessee has rightly deducted tax on payment of EUR 2,10,000 made to GPN, France and no refund was due. 5. Before us Learned Authorized Representative of assessee submitted that CIT(A) erred in holding that an amount of EUR 2,10,000 remitted to GPN, France towards part of total lump sum price of EUR 3,00,000 on net of tax basis for acquisition of process design documentation called Basic Engineering Package on outright purchase basis for Ammonium Nitrate Prill production pursuant to agreement entered into with GPN, France, fee for technical services therefore liable to withholding tax in India. It was prayed that assessee be declared to be not liable to make such deduction of tax on such amount of remittance and tax pai....

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....of a consideration for supply of technical know how for erection of plant for manufacture of licensed products by way of supply of drawings, designs, and detailed engineering services, as being contended by the assessee. Factually speaking, we find no support or material to affirm the stand of the Assessing Officer that the payment does not relate to the acquisition of technical know-how for erection of plant/machinery. 11. Before us, the learned Departmental Representative has pointed out that the break up of the total consideration of US$ 360,000 stated in the initial agreement dated 23.12.1991 has been segregated in the supplementary agreement merely to take the benefit of a judgment of the Hon'ble Supreme Court in the case of Scienti....