AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 609
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....which payments are made by the Appellant without deduction of Tax at source are provided outside India and such entities have no permanent establishments in India thereby qualifying as exigible transactions in accordance with Section 9(1)(vi) and Section 9(1)(vii)(b) of the Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the findings of the lower authorities that the Appellant is an assessee in default with respect to the payment of Rs. 1,19,47,013/8- paid towards the rent for leasing a crane in Srilanka, especially when the entire transaction has occurred outside India and thereby exigible to tax as per Article 7 of DTAA between India and Srilanka and Section 9(1)(vii) of the Act? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the findings of the lower authorities as the Appellant is an assessee in default with respect to the payment of Rs. 3,34,414/- paid towards the service rendered by M/s.Wingtec Rotor Services-Germany, especially when the entire transaction has occurred outside India and thereby exigible to tax as per Article 7 of DTAA and Section 9(1)(v....
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....nstruction, assembly or mining like project, installation of wind turbine requires lot of technicality. M/s.WFPL are required to provide skilled technical assistants and site engineers for executing the installation work. Thus the Assessing Officer held that the services of technical personnel are used in the Installation of Wind turbines and hence, the services rendered by M/s.WFPL to the assessee for his projects in Srilanka are in the nature of Fee for Technical Services. The Assessing Officer referred to Article 12 of India-Srilanka DTAA and stated that the royalty of Fee for Technical Services may also be taxed in the contracting State in which they arise, according to the law of that State, but if the beneficial owner of the royalties or Fees for Technical Services is a resident of the other Contracting State, the tax so charged shall not exceed 10% of the gross amount of the royalties or Fees for Technical Services. It was stated that the services are rendered by M/s.WFPL to the assessee who is based in India and as per Clause (2) of Article 12 of DTAA the payments made towards services rendered by M/s.WFPL are liable to withholding tax at 10%. Without prejudice to the above....
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....t the work being carried out in Srilanka is not mere construction, assembly or mining like project, installation of wind turbine requires lot of technicality and hence, M/s.WFPL provided skilled technical assistants and site engineers for executing the installation work, services of technical personnel are used in the installation of wind turbine and hence the service rendered by M/s.WFPL to the assessee for its project in Srilanka are in the nature of Fee for Technical Services. Further, by referring to Article 12 of India-Srilanka DTAA, it held that services are rendered by M/s.WFPL to the assessee who is based in India and hence as per Clause (2) of Article 12 of India-Srilanka DTAA, the payments made towards services rendered by M/s.WFPL are liable to withholding tax at 10%. Accordingly the finding of the Assessing Officer was upheld. With regard to repair services rendered by M/s.WRS, Germany, the CIT(A) referred to Article 12 of India-Germany DTAA and held that the services being in the nature of Fee for Technical Services is rightly treated as income chargeable to tax in India and hence liable to TDS. With regard to payments effected to M/s.E&Y for market study for Wind Ener....
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....he payments being repair works effected in Germany which clearly qualify under Explanation 2 of Section 9(1)(vii) of the Act. It is further contended that the Tribunal ought to have deleted the addition made on account of all payments effected to M/s.E&Y when the assessee was able to substantiate that the amount paid is towards consultancy services for market study done in UAE in relation to business connection in UAE and hence cannot be construed to be payment made for royalties. Further it is submitted that the payments made to M/s.E&Y are in the nature of business profits would fall under the purview of Article 5, 7 and 14 of Indo UAE DTAA and such payments cannot be taxed in India. In support of his contentions, reliance was placed in the decision of Evolv Clothing Company Pvt. Ltd. vs. Assistant Commissioner of Income Tax ([2018] 407 ITR 72(Mad)) and Principal Commissioner of Income Tax vs. Motif India Infotech (P) Ltd. ([2018] 409 ITR (Guj)). 8.The learned Senior Standing Counsel appearing for the revenue submitted that the Assessing Officer, CIT(A) and the Tribunal have carefully analysed the terms and conditions of the contract as contained in the work order and have rende....
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....expected to re-appreciate the factual position to arrive at a conclusion in the matter. Nevertheless, we noted the findings of the Assessing Officer as affirmed by the CIT(A) and the Tribunal as well as the work order issued by the assessee to M/s.WFPL, Srilanka dated 25.03.2013. The assessee in their reply to the show cause notice dated 08.02.2016 contended that they took the assistance of M/s.WFPL, Srilanka for construction scope to be performed in Srilanka. If we examine the terms and conditions mentioned in the work order, more particularly the scope of work and the various clauses contained therein, we have no hesitation to hold that the nature of activity done in Srilanka is not mere construction or assembly or mining like project. Admittedly, the installation of wind turbine is a highly skilled and technical work. The various clauses in the work order clearly demonstrates the scope of work and therefore, we cannot but hold that the Assessing officer was right in concluding that the services rendered by M/s.WFPL is in the nature of Fee for Technical Services. Similarly, with regard to the services rendered by M/s.WRS, Germany was stated by the assessee to be a repair work. T....
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....ed earlier, the decision can render no assistance to the assessee as the factual position was entirely different. 12.The facts in the case of Motif India Infotech (P) Ltd. was that the assessee provided software related services to its overseas clients. The Assessing Officer came to the conclusion that the assessee had failed to deduct TDS and the expenditure was required to be disallowed. The CIT(A) allowed the assessee's appeal on the ground that the services were utilized outside India in a business or profession carried outside India for the purpose of earning any income outside India. The revenue's appeal before the Tribunal was rejected, against which an appeal was filed to the High Court. The appeal was dismissed by the High Court and in so doing pointed out that the CIT(A) and the Tribunal have accepted the assessee's factual assertion that the payments were for technical services provided by a non-resident for providing services to be utilized for serving the assessee's foreign clients and thus, the Fees for Technical Services was paid by the assessee for the purpose of making or earning any income from any source outside India and clearly the source of in....