TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 33
X X X X Extracts X X X X
X X X X Extracts X X X X
....tances of the case and in law, the learned CIT - A has erred in holding that the payment made by the assessee to its associate concern based in countries apart from Israel, Philippines constitute payments for independent personal services instead of fees for technical services as defined under article 12/13 of the respective Double Taxation Avoidance Agreement. iii. on the facts and in the circumstances of the case and in law, the learned CIT - A) has erred in holding that the payments made by the assessee to its associated concerns based in Israel, Philippines constitute payments for independent personal services instead of royalty as defined under article 12/13 of the respective Double Taxation Avoidance Agreement. iv. On the facts and in the circumstances of the case and in law the learned CIT - A) has erred in holding that the services rendered by the associated concerns to the assessee constitute independent personal services under double taxation avoidance agreement is not appreciating that only those services performed by an independent non-resident alien contractor would constitute independent personal services under DTAA which is not the case here as in this case the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g with the fees for technical services. Therefore the services falls under the ambit of article 14/15 of The Double Taxation Avoidance Agreement dealing with Independent Personal Services or article 5 and 7 of the Double Taxation Avoidance Agreement dealing with business profits and as the services of been rendered outside India and as the non-resident do not have a fixed base/permanent establishment in India, there is no income chargeable to tax in the remittances outside India and therefore no taxes required to be deducted. d. The learned assessing officer rejected the contention of the assessee and held that services rendered by the parties are in the areas of application of high skill as well as technical knowledge, those entities have actually caused the imparting and creating of specialized documents requiring use of high skills and technical knowledge and these entities have provided services which do give any benefits to the assessee and assessee is enabled to use the knowledge shared by the entities during the course of provision of services in various assignments handled by assessee for its clients. Therefore, these entities 'make available" technical knowledge experien....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r stated that KPMG International cooperative is a mutual Association of which the assessee is a member therefore, contribution paid to it are not subject to tax. Further the recipient is a resident of Switzerland and the contribution constitutes the business income of the recipient which is not taxable in India under article 7 in absence of any permanent establishment under article 5 of the Double Taxation Avoidance Agreement. b. The learned AO considered the membership agreement dated 1/1/2007 and thereafter he held that the payment made by the assessee is primarily for the use of name as the assessee derives substantial benefits by being part of the KPMG group and using that name. Therefore, the payment is towards acquiring the right to use the name of KPMG which is certainly in the nature of royalty under article 12 of the agreement. Accordingly, this income is chargeable to tax in India and assessee should have deducted tax at source. Accordingly the above sum is disallowable for non-deduction of tax at source under section 40 (a) (i) of the act. c. The learned CIT - A noted that the issue is squarely covered in favour of the assessee by the decision of the coordinate bench....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sional fees of Rs. 79,915,590/- deserves to be upheld. 09. With respect to the second issue in the appeal of payment of Rs. 434,019,511 paid to KPMG corporate Switzerland he submitted that this issue has been decided by the coordinate bench in assessee's own case for assessment year 2001 - 02 is per order dated 7 April 2017 and therefore this issue is also squarely covered in favour of the assessee, same has not been challenged by the learned assessing officer before the higher forum. Accordingly, he submitted that the order of the learned CIT - A on the second issue also deserves to be allowed. 10. Even on the merits of the issue for this year, he referred to a chart is with respect to all 21 items of payment of consultancy fees to the foreign entities outside India for services rendered by them outside India stating that how they are covered by the decision and no taxes required to be deducted thereon. He further referred to a detailed chart submitted with respect to ground number 5 & 6 referring to each of the clauses of membership agreement which are disputed by the learned assessing officer. He also referred to the decision of the honourable Supreme Court in case of the Secu....