2015 (10) TMI 466

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....esigns of furniture clearly being transfer of special knowledge and in ignoring the fact that Circular No. 786 dated 07/2/2000 has been withdrawn with retrospective effect by circular No. 7/2009 dated 22/10/2009" 2. In this case, TDS verification was conducted in the case of M/s TAB India Granites Pvt. Ltd. on 18/03/2010. The assessee had made payments to various non-residents in foreign currency on account of sales commission Rs. 85,21,582/- and advertising Rs. 12,61,188/- without withholding tax U/s 195 of the Income Tax Act, 1961 (hereinafter referred as the Act) during the financial year 2005-06. The Assessing Officer gave reasonable opportunity of being heard on both the issues, which was availed by the assessee. It was held that the ....

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....llace Pharmaceuticals (P) Ltd. IN RE AAR No. 658 of 2005 278 ITR 97 (AAR). ii. South West Mining Ltd. IN RE AAR No. 660 of 2005 278 ITR 233 (AAR). iii. Maruti Udyog Ltd. Vs. Astt. Director of Income Tax 2010 TIOL 22 ITAT DEL dated 31/08/2010. iv. CIT Vs. Samsung Electronics (Karnataka) ITA No. 2808 of 2005 dated 24/09/2009, 2009 TIOL 629 HC- Kar-IT. The other contention of the assessee that the advertisement company's income does not fall under the provisions of Section 9 is not correct as according to the Section 9(1)(c) only in the case of non-resident, being a person engaged in the business of running a news agency or of publishing news papers, magazines or journals, no income shall be deemed to accrue or arise in India to him throug....

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....s did not fall under managerial, technical or consultation services and therefore, no income could be deemed to have accrued or arising to the non-resident so as to attract provision of withholding tax U/s 195 of the Act. The learned Assessing Officer was not satisfied with the explanation given by the assessee and he totally relied on explanation introduced in Section 9 by Finance Act, 2010. The procuring of sales order did not involve any technical expertise, knowledge or skills. It is evident that managerial services are those services that involved the activity of managing or controlling. Foreign commission agents have neither any control over the export activity of the assessee nor they are the final authority in respect of the same. T....

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.... Now the Revenue is in appeal before us. 4. The learned D.R. supported the order of the Assistant Director of Income Tax (International taxation) and argued that the recipient has rendered services in the India and income earned in the India and also covered under the explanation "Fees for Technical Services" as defined in Section 9(1)(vii)(b) of the Act. 5. At the outset, the learned A.R. for the assessee supported the order of the learned CIT(A) and relied upon a recent decision of this Bench of the ITAT in the case of the ADIT, (International Taxation), Jaipur Vs. M/s Tab India Granites (P) Ltd. in ITA Nos. 42,43,44,45 & 46/JP/2012 and argued that the assessee exported the goods and services taken outside the India and payments were ma....