TaxTMI 
TaxTMI 
2021 (7) TMI 31
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Assessment Year 2013-14 and 2014-15. The case was selected for scrutiny under CASS. The Assessing Officer, during the course of the assessment proceeding noticed that the assessee had claimed Rs. 1,28,34,756/- for the Assessment Year 2013-14 and Rs. 26,23,59,611/- for the Assessment Year 2014-15 as selling expenses overseas. However, no TDS under Section 195 of the Income Tax Act, 1961 was made towards the payments made to parties. Hence, the Assessing Officer felt that these activities tantamount to managerial and technical services as envisaged under Section 9(1)(vii) of the Act. Hence, the above payments claimed as selling expenses has been disallowed under Section 40(a)(i) of the Act and added to the income of the assessee. Aggrieved ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9 (Madras) [Evolv Clothing Co. (P) Ltd. Vs. Assistant Commissioner of Incometax, Company Circle-ii(1), Chennai], wherein the Hon'ble Division Bench held as follows: "... 31. Section 195 of the IT Act attracts tax only on chargeable income, if any, paid to a non-resident. Where there is no liability, the question of tax deduction does not arise. Where no part of the income is chargeable in India, even clearance under Section 195(2) or 195(3) of the IT Act is not necessary. The decision of the Karnataka High Court in CIT (International Taxation) v. Samsung Electronics Co. Ltd., [2010] 320 ITR 209/[2009] 185 Taxman 313 (Kar), has been overruled by the Supreme Court in GE India Technology Centre (P.) Ltd. v. CIT [2010] 327 ITR 456/193 T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)(vii)(b), income by way of fees for technical services payable by a person, who is a resident, is taxable income except where 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. In view of Explanation (2) to Section 9(1)(vii), technical services means any consideration, including lumpsum consideration, for rendering of any managerial, technical or consultancy services, including the provision of services of technical or other personnel, but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient. Service of market survey only to asce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al or other personal) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration, which would be income of the recipient chargeable under the head salaries. Explanation (B) to Section 40(a)(i) provides that the expression "fees for technical services" in Section 40(a)(i) shall have the same meaning as in Explanation 2 to Clause (vii) of sub-section (1) of Section 9. 37.On a reading of Explanation (2) to Section 9(1)(vii), fees for technical services means consideration, including lumpsum consideration for rendering any managerial, technical or consultancy services. 38.In the instant case, the Assessing Officer has, in the assessment order, accepted that the appe....