TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 629
X X X X Extracts X X X X
X X X X Extracts X X X X
.... other related services rendered by the non-resident company would not fall within the services contemplated under Section 9(i)(vii) of the Act? (iii) Whether the tribunal was correct in setting aside the order passed under Section 201(1A) of the Act? 2. The factual background, in which the aforesaid substantial question of law which arise for consideration needs mention. The assessee is engaged in the business of manufacturing and export of garments and 100% export oriented undertaking. The assessee company requires to import accessories from other countries and mostly from Europe. For the aforesaid purpose, the assessee had engaged M/s Sharp Eagle International, Honkong (hereinafter referred to as 'non resident company' for short) to render various services at the time of import such as inspection of fabrics, timely dispatch of material etc. The assessee company paid 12.5% of the import value as charges to the aforesaid non resident company. The assessee made payments to non resident company in assessment year 2007-08 without deduction of TDS. The Assessing Officer by an order dated 11.08.2008, inter alia held that non resident company is a service provider and is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act. It is also urged that non resident company has an expertise in textile and under the agreement it was required to check quality, quantity and to ensure timely dispatch of materials and therefore, the non resident company had rendered managerial services. Alternatively it is submitted that the services rendered by the non resident company, in any case, amount to consultancy services. In support of aforesaid submissions, reliance has been placed on decisions of the Supreme Court in 'CENTRAL BOARD OF DIRECT TAXES VS. OBEROI HOTELS (INIDA) (P) LTD., (1998) 97 TAXMAN 453 (SC) and 'GVK INDUSTRIES LTD. & ANR. VS. THE INCOME TAX OFFICER & ANR., CIVIL APPEAL NO.7796/1997 DATED 18.02.2015 5. On the other hand, learned counsel for the assessee submitted that the assessee gets raw material from abroad and under the agreement non resident company is required to inspect and ensure quality of sample approved by the assessee and to ensure timely delivery. It is pointed out that under the agreement the non resident company had no role in selecting samples, design or colour, but it acts only as commission agent. It is also pointed out that all the documents were supplied before ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; or (c) a person who is a non- resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India: Provided that nothing contained in this clause shall apply in relation to any income by way of fees for technical services payable in pursuance of an agreement made before the 1st day of April, 1976 , and approved by the Central Government. Explanation 1-For the purposes of the foregoing proviso, an agreement made on or after the 1st day of April, 1976 , shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date. Explanation 2- For the purposes of this clause," fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsaction between them, or where the non- resident is directly soliciting business for the resident and generating income out of such solicitation. It is equally well settled legal proposition that tribunal is a fact finding authority and decision on facts rendered by the tribunal can be gone into by High Court only if a question is referred to it, which says the finding is perverse [See: SANTHOSH HAZARI VS. PURUSHOTTAM TIWARI', (2001) 3 SCC 179 and a decision of this court in CIT VS. SOFT BRANDS (P) LTD.', (2018) 406 ITR 513]. 8. In the backdrop of aforesaid well settled legal principles, we may examine the facts of the case in hand. It is pertinent to mention here that the assessee had filed copies of agreement, brief note on nature and purpose of remittance, invoice copies, list of suppliers and chartered accountant's certificate for remittance before the Assessing Officer. However, the Assessing Officer has failed to take note of the same. Similarly, the assessee had filed e-mail correspondences pointing out various activities carried out by a non resident company in terms of the agreement executed between the parties dated 01.03.2006. The assessee has also provided....