TaxTMI 
TaxTMI 
2022 (3) TMI 1064
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....essing Officer [AO] u/s. 201(1)/201(1A) of the Act on 31-03-2017. The grounds raised by the assessee read as under: 1. The order of Commissioner of Income tax (Appeals) is contrary to law, facts, and circumstances of the case. 2. The Commissioner of Income tax (Appeals) erred in confirming the levy of interest under 201 (1)/201 (1A) of the Income Tax Act 1961. 3. The Commissioner of Income tax (Appeals) erred in confirming that expenditure for carrying out the warranty by the Distributors constitute 'fees for technical services' requiring tax deduction at source. 4. The Commissioner of Income tax (Appeals) should have found that the warranty services are "inextricably and essentially linked to the....
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.... (iv) Ciena India Private Limited, vs ITO ITA Nos.- 959 a 984/Del/2011 (v) Nissan Motor India Private Limited Vs DCIT, ITA No.1854/CHNY/2017 9. The Appellant submits that alternatively even if the amounts are held taxable in India, the Commissioner of Income tax (Appeals) ought to have appreciated that carrying out the warranty constitute business income of the Distributors abroad and as they have no PE in India, no part of the income is taxable in India subject to withholding tax. 10. The Commissioner of Income tax (Appeals) ought to have appreciated the fact that the parties to whom payments were made had no Permanent Establishment in India, the payments have- been made directly to the nonresidents abroad, do....
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....ion towards fitment and repair charges. The expenditure so incurred was reimbursed by the assessee to non-resident distributors on actual basis. Since, the same were mere reimbursements, not tax was deducted at source (TDS) while making the reimbursement. It was also stated that the entire work was carried and utilized outside India and therefore, no Tax was required to be deducted at source. Since the non-resident distributors had no permanent establishment in India, the receipts were not taxable in their hands as per Double Taxation Avoidance Agreement. The payments would not fall under 'fees for technical services' since there was no rendering of any technical skill, know-how or knowledge involved. 4.2 However, all these submissions w....
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....the assessee. The claim by the dealer was only in the nature of business expenditure incurred by the assessee in the course of their business of selling tractors. Another submission was that the services were rendered and utilized outside India and therefore, no tax would be required to be deducted as per various judicial pronouncements since the non-resident distributors did not have any permanent establishment (PE) in India. However. Ld. CIT(A) chose to confirm the stand of Ld. AO, inter-alia, by noticing that the contract of warranty was between the assessee and the customers and the contract for carrying out the warranty services was between the assessee and dealers. The services so rendered were fees for technical services and th....
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....7. After going through the cited decision, we find that similar was the issue in that case. The bench, after considering the provisions of Sec.9(1)(vii)(b) held that payment made by the assessee to a person outside India for earning income from any source outside India would not require tax at source u/s 195 since the income of recipient would be excluded from the deeming provisions of Sec.9(1) of the Act. The relevant observations of the bench were as under: - 4.4 Before us the Ld.AR pointed out the provision of Section 9(1)(vii)(b) of the Act and argued by stating that, the exemption to the provision clearly provides, where any resident pays fees in respect of services for the purpose of making or earning any income from any sour....
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....g any income from any source outside India, the income arising from such payment shall be excluded from the deeming provision of Section 9(1) of the Act viz., "income accruing or arising in India". In the case of the assessee, the assessee is a manufacturer of motor cars in India and exports the motor cars to other countries and sells them in those countries through its sister concerns who acts as the dealer of the assessee company. The assessee company also provides warranty to the end customers who purchase the car. The assessee's sister companies who acts as the dealers of the assessee company maintains the cars sold by them according to the terms of the warranty promised by the Assessee Company, towards which the dealer companies incurs....