TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 423
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....or technical services as per section 9(1)(vi) & (vii) of the I.T. Act as well as per Article 13(4) of DTAA." 2. We have heard the arguments of both the sides and also perused the relevant material on record. As regards the issue raised in ground No. 2, it is observed that the amount received from M/s Maersk India Private Limited (MIPL), M/s Maersk Logistics India Limited (MLIL) and M/s Safmarine India Private Limited (SIPL) towards their share of IT Global Portfolio Tracking System was brought to tax by the A.O. in the hands of the assessee company in India to the extent of Rs. 7,49,84,869/- (50% of Rs. 14,99,69,738/-) in the assessment completed u/s 143(3) r.w.s. 147 of the Act and balance 50% amount was brought to tax in the hands of Danish Company Dampskibsselskabet af 1912 Aktiesselskab. On appeal, the ld. CIT(A) however deleted the addition made by the A.O. on this issue following inter alia the Tribunal's order in the case of Dampskibsselskabet af 1912 Aktiesselskab for assessment years 2000-01 to 2003-04 rendered vide its order dated 11-6-2010 passed in ITA No. 2083, 2084,2085/Mum/09 wherein the similar additions made by the A.O. were deleted by the ld. CIT(A). 3. At t....
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....t of systems mainly include network costs, data communication, data production, data processing costs etc. Without these systems the international shipping business cannot be conducted nor would the agents of the Assessee across the work be able to discharge their role as agents of the Assessee. This facility enables its agents across the world to access several information like tracking of cargo of a customer, transportation schedule, customer information, documentation system and several other information which we have already set out in the earlier part of this order. The cost for setting up this global telecommunication facility is shared between the Assessee and its agents across the world. We have already seen the relevant clause in the agreement between the Assessee and the agent and a reference to the rate sheet attached to the agency agreement. In respect of such cost sharing the Assessee has raised invoice on its agents MTL, MLIL, SIPL. The Assessee's Chartered Accountants at Denmark, M/S. KPMG have duly certified the basis of cost sharing between the Assessee and have opined that it was only reimbursement of cost and no profit element is involved in the use of the fa....
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....ider of every instrument or facility used by a person cannot be regarded as providing technical service. When a person hires a taxi to move from one place to another, he uses a product of science and technology, viz., an automobile. It cannot on that ground be said that the taxi driver who controls the vehicle, and monitors its movement is rendering a technical service to the person who uses the automobile. Similarly, when a person travels by train or in an aeroplane, it cannot be said that the railways or airlines is rendering a technical service to the passenger and, therefore, the passenger is under an obligation to deduct tax at source on the payments made to the railway or the airline for having used it for travelling from one destination to another. When a person travels by bus, it cannot be said that the undertaking which owns the bus service is rendering technical service to the passenger and, therefore, the passenger must deduct tax at source on the payment made to the bus service provider, for having used the bus. The electricity supplied to a consumer cannot, on the ground that generators are used to generate electricity, transmission lines to carry the power, transform....
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....ay, the aeroplane, consumption of electrical energy, etc. Such facilities which when used by individuals are not capable of being regarded as technical service cannot become SO when used by firms and companies. The facility remains the same whoever the subscriber may be - individual, firm or company. "Technical service" referred in section 9(1)(vii) contemplates rendering of a "service" to the payer of the fee. Mere collection of a "fee" for use of a standard facility provided to all those willing to pay for it does not amount to the fee having been received for technical services. 17. The payments received by the Assessee are for providing a facility to its agents. The payment received is nothing but a payment by way of reimbursement of the cost for providing a particular facility. The Assessee is in the business of shipping and not in the business of providing any technical service. We are of the view that this ratio of Hon'ble Madras High court will apply to the facts of the present case. The Assessing Officer in coming to the conclusion that the payment was for fee for technical services has relied on the fact that there has been use of sophisticated equipments. This by i....