2021 (9) TMI 105

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....made by the A.O. u/s 40(a)(i) of the Income-tax Act,1961 ['the Act' for short] and it relates to assessment year 2013-14. 2. The assessee is engaged in the business of manufacture and sale of seals and bearings. The assessee has entered into an international transaction of payment of communication charges to its Associated Enterprise (A.E.) The TPO held that the payment to be at arm's length and accordingly, did not make any transfer pricing adjustment. The A.O., however, noticed that the assessee has not deducted tax at source on the amount of Rs. 54 lakhs paid to it's A.E. Accordingly, the A.O. issued show cause notice to the assessee to explain why disallowance u/s 40(a)(i) of the Act should not be made. In the reply, the asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t is nothing but fees for technical services liable for TDS or payment for purchase of software. He also observed that the A.O. should verify the details of TDS deducted from the payment of management fee of Rs. 52,67,660/-. It can be noticed that the Ld CIT(A) has held that the impugned payment is Fee for technical services or Royalty. Aggrieved by the order passed by Ld. CIT(A), the assessee is in appeal before us. 6. The Ld. A.R. submitted that the parent company (AE) is providing "common infrastructure facilities" and the impugned payment has been made by the assessee for use of those infrastructure facilities. He submitted that the details of services provided by the AE are given in a document titled as "Group I.T. Services Catalogu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....as enhanced the disallowance without giving statutory notice as per provisions of section 251(2) OF THE Act. Further, he submitted that the decision rendered by Hon'ble Karnataka High Court in the case of Samsung Electronics Ltd. (supra) has since been reversed by the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. 8. On the contrary, the Ld. D.R. submitted that the Ld. CIT(A) has incorporated the submissions made by the assessee before the A.O. and based upon the same has come to the conclusion that the services provided by the A.E. to the assessee are in the nature of fee for technical services. Further, by placing reliance on the decision rendered by Hon'ble Karnataka High Court in the case of ....