TaxTMI 
TaxTMI 
2023 (4) TMI 939
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....ly, the facts relating to this issue are, the assessee is a limited liability partnership firm and is a resident of India. As stated by the Assessing Officer, the assessee provides international accounting and advisory services to various clients within India and abroad. For the assessment year under dispute, the assessee filed its return of income on 27.09.2013 declaring income of Rs.20,05,79,536. 4. In course of assessment proceedings, the Assessing Officer noticed that in the year under consideration, the assessee had paid professional fee amounting to Rs.33,06,542 to various overseas entities without withholding tax at source. 5. Noticing this, the Assessing Officer called upon the assessee to explain why the payments made should not ....
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....e nature of managerial, technical and consultancy services, however, since, the make available condition enshrined in the treaties is not fulfilled, they will not qualify as FTS. Accordingly, he deleted the disallowance made under Section 40(a)(i) of the Act in respect of such payments. Further, he deleted the disallowance made under Section 40(a)(i) in respect of payments made to entities in Cyprus and Indonesia on different reasonings. 5. Admittedly, the Revenue is not in appeal against such decision of learned Commissioner (Appeals). The only disallowance sustained by learned Commissioner (Appeals) was in respect of payment made of Rs.7,57,940 to Warth&Klein Grant Thornton AG of Germany. 6. Learned Commissioner (Appeals) observed that ....
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....ents in Germany. The issue which falls for consideration is the nature of payment made and its taxability in India at the hands of the recipient. While, learned Commissioner (Appeals) has treated it as FTS under Article 12(4) of India-Germany Treaty, the assessee claimed it as payment for Independent Personal Services falling under Article 14 of the treaty. On careful reading of Article 14 of treaty as a whole and specifically Article 14(1), it is observed that it is only applicable to income derived by an individual towards certain professional services. The term "Professional Services" has been defined under Article 14(2) to mean independent scientific, literary, artistic, educational or teaching activities, as well as the independent act....