TaxTMI 
TaxTMI 
2026 (5) TMI 1271
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....of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons and, hence, we condone the delay and adjudicate the appeal. 3. The only issue raised by the assessee in the various grounds of appeal is against the order of Ld. CIT (A) in confirming the demand of Rs.35,57,540/- as made by the Ld. AO in respect of TDS default u/s.201(1) of the Act of Rs.28,39,195/- and Rs.7,18,340/- being interest u/s.201(1A) of the Act by treating the assessee in default u/s.201(1) of the Act. 4. The facts in brief are th....
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....dency certificate of ACCWLI. However, as per section 9(1)(vii)(b) of the Act read with Explanation 2, DTAA between India-UAE and Circular No 33 dt 02.04.1982, the remittance made to ACCWLL of UAE by the assessee as "Fee for Technical Services" is taxable in India. According to the AO as per section 195(1) of the Act, the assessee is liable to deduct the tax at source @20% on the amount of remittance. Therefore as per section 201(1) of the Act assessee is an assessee in default and is liable to pay interest as per section 201(1A) of the Act. The AO accordingly raised a demand u/s.201(1)(1A) of the Act aggregating to Rs.35,57,540/- vide order dated 28.11.2019. 5. Being aggrieved by the said assessment order, the assessee preferred an appea....
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....nce or recourse from the service provider. The mere fact that the service provider deploys its own technical expertise, experience, or specialised knowledge in the course of rendering services does not, by itself, lead to a conclusion that such expertise has been made available to the recipient. In our opinion what is relevant is not the delivery of the end result of a technical service, but the transfer of the underlying know-how, methodology, or process that empowers the recipient to replicate or apply the same technology on its own in future. In the absence of such transfer, the condition of "make available" remains unfulfilled. Thus, the true test is not whether the services are technical or consultancy-oriented in nature, but whether, ....
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....cts the source taxation of only such technical services, referred to as ' included services' in Indo US tax treaty, as make available the technical knowledge etc. The connotations of expression 'make available' were examined by the Tribunal in the case of Raymond Ltd. vs. Dy. CIT (86 ITD 793). The Tribunal, after elaborate analysis of all the related aspects, observed that "Thus, the normal, plain and grammatical meaning of the language employed, in our understanding, is that a mere rendering of services not roped in unless the person utilising the services is able to make use of technical knowledge, etc. by himself in his business and or for his own benefit and without recourse to the performer of services, in nature". The Tribunal....
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.... by himself, in his business or for his own benefit, and without recourse to the service provider. 9. Thus, we are inclined to observe that the amount remitted by the assessee to the UAE company is not a fee for technical services. 10. We have also perused the Double Taxation Avoidance Agreement (DTAA) between India and the United Arab Emirates (UAE) and find that it does not contain any specific article dealing with "Fees for Technical Services" (FTS). In our opinion, it is a settled legal position that where a DTAA does not specifically provide for taxation of Fees for Technical Services, such income cannot be brought to tax by resorting to the domestic law provisions of section 9(1)(vii) of the Income-tax Act, 1961. The absence of ....
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....ovisions cannot be read into the treaty. The Court affirmed that such income falls under Article 7, and in the absence of a PE in India, the same is not taxable. 12. Similar ratio has been laid down in the following cases :- i) Booz & Company (ME) FZ-LLC. Deputy Director of Income-tax (International Taxation) (201890taxmann.com49) ii) ABB FZ-LLC v. Income-tax Officer (International Transactions), Ward -1(1), Bangalore [2016] 75 taxmann.com 83 (Bangalore - Trib.) iii) Castlewick FZE v. ACIT, International Taxation reported in [2025] 175 taxmann.com 914 (Chennai-Trib) : iv) Deputy Commissioner of Income-tax, International Taxation v. Kalpataru Power Transmission Ltd. [2023] 149 taxmann.com 484 v....