2025 (1) TMI 1720

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....llowing Grounds of Appeal: "1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by AO of Rs. 2,03,91,052/- under section 40(a)(i) of the Income-tax Act, 1961 on the ground that foreign agent provided referral services to the appellant without distinguishing how the FTS takes the nature of a statutory by undefined referral service and such referral services do not fall in the category of technical, managerial or consultancy service, therefore, it could not be in the nature of 'fees for technical services?" 2. "Whether the Ld.CIT(A) has erred in holding that the foreign agent had no PE in India without recognizing that income earned as a part Export Sa....

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....le 22 of DTAA and as TDS was not done, they are liable for disallowance u/s. 40a(ia) of I.T. Act, while completing the assessment. The Ld. CIT(A) deleted the addition made by Ld. A.O. stating that these payments won't attract TDS provisions as they are normal business expenditure because US FDA has never made available knowledge or skills to carry out the testing of the products of the assessee and the USFDA has simply issued "Testing Certificate" in lieu of the payments made by assessee company. It was also held that US FDA is a US Government agency and payments made to the same don't govern the provisions of IndoUSA DTAA. Hence, the testing charges paid to USFDA or paid to assessee company's AE towards testing charges paid to US-FDA are n....

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..... This subsequent Ld. CIT(A)'s order is now appealed against by revenue, it was submitted. The Ld. AR of assessee company filed a paper book containing the assessment order and the related Ld. CIT(A) order which were passed by the International Tax Division with a submission that the Department did not file an appeal to ITAT. As the Department accepted the order of Ld. CIT(A), now they cannot agitate the same before ITAT and hence the appeal of revenue should be dismissed on the principle of consistency as well as on merits. 7. Heard both sides. There is force in the argument of Ld. AR of appellant company and the issues are adjudicated in favour of appellant company for the following reasons: a) The payments were made by assess....