2016 (2) TMI 1202

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.... 2.Effective Ground of appeal is about deleting the additions of Rs. 37.84 lacs. During the assessment proceedings,the AO found that the assessee had made payments to non-residents under the heads training fee(Rs.20.68 lacs),service fee (Rs.12.04 lacs and royalty payment (Rs.5.11 lacs),that it had not deducted tax at source while making the above mentioned payments. He held that the assessee was hit by the provisions of section 40(a)(ia) of the Act. He asked the assessee to explain as to why the expenditure claimed by it should not be disallowed. After considering the reply of the assessee, the AO held that the assessee had paid training fee, survey charges and royalty to non-residents for services to be utilised for its business, that as ....

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.... India in view of clause(a) to Explanation 1 of Section 9(1)(i), that the equipment manufacturers had no business operation with India, that no income had accrued or arisen in India to the non-residents, that the service charges received by the assessee would not amount to transfer of any right in respect of any patent, invention etc., that the suppliers by giving reference were not imparting any information which was in nature of technical/industrial/commercial/scientific knowledge, experience or skill., that they were also not rendering any services in connection with the activities referred in the sub clauses of Explanation 2 to section 9(1)(vi).He referred to the case of Cushman and Wakefield (S) Pte. Ltd.(305 ITR 208) and Sheraton Inte....

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....purchase blank certificates from equipment manufacturers,that it also undertook servicing of life boats and its lunching appliances, that to carry out the servicing of such equipments service personnel would be sent outside India for training, that the training fee included accommodation and conveyance, that both these payments were reimbursement of actual expenditure, that no TDS is required to be deducted for such payments. We find that the FAA has given a categorical finding of fact that none of the payments in question are covered by the provisions of section 9, that the non residents had no PE in India, that the assessee was not liable to deduct tax at source for these payments. We are of the opinion that his order does not suffer from....