TaxTMI 
TaxTMI 
2023 (3) TMI 422
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....ppeal by the Revenue, directed against the order dated March 20, 2020 in ITA No. 490-503/Bang/2019 passed by the Income Tax Appellate Tribunal [ITAT] has been admitted to consider following questions of law: i. Whether on the facts and in the circumstances of the case, the Tribunal erred in holding that orders passed under Section 201(1) and 201(1A) are time barred as same are passed after six years from end of F.Y.2010-11 without appreciating that the Memorandum of Finance Bill 2009 makes the intent of legislature very clear on the issue of not prescribing any time limits for exercising powers under Section 201 and 201(A) due to challenge in administering the recovery of taxes from NRI's and also there is no time limit prescribed in the ....
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....the assessee for marketing services to the US Company is taxable in India as FTS [Fee for Technical Services]. CIT(A) [Commissioner of Income Tax (Appeals)] partly allowed assessee's appeal holding that the payments received by the US Company was both royalty and consultancy services and taxable under the Act as well as DTAA [Double Taxation Avoidance Agreement]. ITAT allowed assessee's appeal holding that the payments made cannot be considered as royalty or fees and hence, no TDS was required to be deducted. Feeling aggrieved, Revenue has filed this appeal. 4. Shri. K. V. Aravind, for the Revenue, praying to allow the appeal, submitted that: * the Tribunal has erred in holding that the assessee was not under obligation to deduct TDS....
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....the Act; * Section 9(1)(vii) of the Act makes it clear that a receipt will become income deemed to accrue or arise in the hands of a non-resident in India, only if the same has been made to the non-resident, by way of Technical Knowhow Fee, for the purpose of 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; * Section 9(1)(vii)(b) provides an exception to the general source rule by providing that where the services rendered by the non-resident provider are utilized by the resident payer for purposes of earning income from a source outside India, in such a situation, such fees would not be deemed to accrue or arise in India; * the payment made re....
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....e Contracting State. 11. The AO has extracted the services rendered by the US Company in para 15 of his order and the services read as follows: "WHEREAS Ad2pro India and Ad2pro USA have decided to mutually beneficial partnership under which Ad2pro USA will provide business facilitation services which would include the following: a. Assistance in arranging and facilitating rendering of advertisement design services of Ad2pro India in USA; b. Assistance in developing market for services rendered by Ad2pro India in USA; c. Assistance in providing customer leads and procurement of orders for Ad2pro India; d. Assistance in negotiations with customers and in finalizing contracts between customers and Ad2pro India; e. Assistance ....
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....contract without sharing the technical knowledge or knowhow is perverse. 15. The ITAT has noted in para 14 of its order that the scope of the work is to generate customer leads using/subscribing customer data base, market research, analysis, and online research data and rightly held that the service provider has not made available any technical knowledge, experience, knowhow, process or develop and transfer technical plan or technical design. 16. Shri. Aravind, placing reliance on GVK Industries Ltd., contended that the facts are identical and therefore, the impugned order passed by the ITAT is not sustainable. 17. In reply, placing reliance on M/s. Lufthansa Cargo India, Shri. Chandrasekhar urged that the authority in GVK Industries Lim....
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....aintenance and repairs payments were made for the purpose of earning outside India. "The exception carved out in the latter part of clause (b) applies to a situation when fee is payable in respect of services utilized for business or profession carried out by an Indian payer outside India or for the purpose of making or earning of income by the Indian assessee i.e. the payer, for the purpose of making or earning any income form a source outside India. On a studied scrutiny of the said Clause, it becomes clear that it lays down the principle what is basically known as the "source rule", that is, income of the recipient to be charged or chargeable in the country where the source of payment is located, to clarify, where the payer is located.....