TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 1440
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....o tax has been deducted at source on such remittance and to explain why the assessee should not be treated as assessee in default for non deduction of tax at source u/s. 201(1) and 201(1A) of the I.T. Act. 2.1. The assessee filed a detailed explanation explaining that it entered into an agreement with M/s. Appledore International Ltd. of England on 25.4.2003 which was modified by additional Corrigendum made on 2.5.2003. It was explained that M/s. Appledore International Ltd., was to evaluate the business opportunities for Pipavav Ship Dismantling at Pipavav, Gujarat, India. As per the agreement, the total value of the contract was GBP 1,59,200 excluding reimbursement of actual travelling expenses. The details of year-wise remittance made and tax deducted at source were shown as under: 2.2. After perusing the details, the AO noticed that in respect of certain services, the assessee has deducted tax at source, while in respect of some other services, the assessee has not deducted tax at source. The assessee was asked to explain its stand. 2.3. The assessee explained that Article 13 is not applicable as the services rendered by Appledore as specified in the corrigendum to the agree....
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..... The attention of the First Appellate Authority was drawn to the decision of the Hon'ble Supreme Court in the case of Continental Construction Co. Ltd. 219 ITR 81 wherein the Hon'ble Supreme Court has held that there may be a case where under a single contract with single indivisible consideration with separately identified sets of activity, it is possible to apportion the single consideration between different sets of activities. It was further contended that the payment of GBP 88,950 does not fall within the meaning of "fees for technical services" as defined in Article 13(4) of the Treaty. 3.1. After considering the facts and the submissions in the light of the DTAA between India and UK and drawing support from the ruling of the authority for Advance Rulings in the case of Intertek Testing Services India Pvt. Ltd. 307 ITR 418, the Ld. CIT(A) was convinced that in respect of services which are commercial in nature and do not fall under the FTS, therefore, there was no need to deduct withholding tax on the payment of GBP 88950 and allowed the appeals of the assessee. 4. Aggrieved by this, the Revenue is before us. 5. The Ld. Departmental Representative strongly support....
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.... to create in-house Design capabilities (d) Strategy for manning and for training of personnel (e) The number of phases of development required and the time frames/activity content of each phase. 3. Examination of the docks, their approaches and the site conditions for safe ship handling, docking and undocking and recommend actions to be taken. If any. Also recommend means of providing alters in both the dry docks. 4. Estimation of cash flow for each phase of the Master Plan including capital requirement, establishment of financial structure, IRR and pay-back period based on business opportunities and growth as predicted by the market studies at Sr. I above. 5. A comprehensive Report to be submitted within 6 months of award of the consultancy covering all the above aspects duly supported by necessary documents, drawings & calculations. Reports targeted for 31st October 2003. 6. An initial Report within 2 months of award of the consultancy recommending minimum infrastructure required for undertaking repairs in afloat condition of Vessels such OSVs & merchant ships calling at Pipavav Port. Report targeted for 30th June 2003." 7.1. It was agreed that the assessee will pay....
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....a and UK as technical services. It is further contended that the services cannot be even taxed under Article-7 read with Article-5 of the DTAA in the absence of PE of M/s. Appledore International Ltd. We find that the AO has rejected the claim of the assessee and held that the services rendered by M/s. Appledore International Ltd., are in the nature of technical services. 7.3. Services can be said to "make available" technical knowledge etc, where such technical knowledge is transferred to the person utilizing the service that is the assessee in the present case and such person is able to make use of the technical knowledge etc by himself in his business or for his own benefits and without recourse to the performer of service in the future. We find that on the second set of services M/s. Appledore International Ltd., has merely provided services for global market survey to determine demand for repairs, conversions, new builds and to determine the short/medium/long term business prospects at Pipavav. To determine a strategy for manning and training personnel an estimation of cash flows and capital requirements, financial structure and pay-back period and provide report for the same....