TaxTMI 
TaxTMI 
2026 (9) TMI 247
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....-13 Ld.CIT(A)-56, Mumbai 29/11/2025 2015-16 NFAC, Delhi 27/03/2025 2018-19 Ld.CIT(A)-56, Mumbai 02/12/2025 2019-20 2. At the outset, it is noticed from the appeal record that there is a delay of 27 days in filing the appeals by the Revenue for AYs 2012-13 and 2015-16 before this Tribunal. Though no separate applications for condonation of delay have been filed by the Revenue, having regard to the short delay involved and upon perusal of the material available on record, we find that the delay is neither intentional nor deliberate. In the interest of substantial justice and considering the overall facts and circumstances of the case, we deem it appropriate to condone the delay of 27 days in filing the appeals. ....
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....eld that the impugned payments did not constitute FTS and that the same were not chargeable to tax in India. Accordingly, the demand raised u/s 201(1) and 201(1A) was deleted. Aggrieved by the order passed by the Ld.CIT(A), the Revenue is in appeal before us for all the years under consideration. 4. The Ld.AR submitted that the issue is squarely covered by the decision of the co-ordinate Bench in the assessee's own case for AYs 2013-14 and 2014-15 in ITA Nos. 2474 & 2412/Mum/2026, order dated 30/07/2026. It was submitted that, although the countries of the grading entities in the present appeals are different from those involved in the aforesaid order, the nature of services rendered remains identical. 4.1. The Ld.AR submitted ....
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....echnical or consultancy services even under the respective treaty provisions. Reliance was placed, inter alia, on judicial precedents dealing with inspection, testing, certification and quality examination services. 4.5. The Ld. AR also submitted that, in the case of payments made to GIA through its laboratories situated in Hong Kong and Thailand, the actual recipient was GIA, USA and the laboratories merely functioned as facilities through which the grading activity was undertaken. Reliance was placed on the decision of the Hon'ble Surat Bench of this Tribunal in ITO v. Star Rays reported in [2022] 139 taxmann.com 437, affirmed by the Hon'ble Gujarat High Court in CIT(IT) v. Star Rays reported in [2023] 153 taxmann.com 226. 4....
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.... in these appeals is whether the payments made by the assessee to various non-resident entities towards diamond grading and certification services constitute fees for technical services chargeable to tax in India, thereby giving rise to an obligation on the assessee to deduct tax at source u/s 195 of the Act. 6.1. At the outset, we note that the identical nature of services has already been examined by the co-ordinate Bench in the assessee's own case for AYs 2013-14 and 2014-15 in ITA Nos. 2474 & 2412/Mum/2026 vide order dated 30/07/2026. In the said decision, the Tribunal, after examining the material placed on record, noted that GIA merely examines the diamonds submitted by the assessee and issues an independent grading report desc....
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....herefore, find no merit in the contention of the Revenue that the mere application of specialised expertise or technical equipment by the grading entity would convert the consideration paid for the resultant certification into FTS. The fact that the grading report may commercially enhance the credibility or marketability of the assessee's diamonds cannot, in our view, alter the essential character of the service rendered. 6.5. We also note that the co-ordinate Bench, while considering the payments made to GIA, has held that the grading and certification services do not fall within the ambit of FTS as defined in Explanation 2 to section 9(1)(vii) of the Act. The Tribunal further observed that the identity or location of the non-reside....
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.... that such decisions did not deal with certification or grading services of the nature involved before the Tribunal. 6.9. In the present appeals also, the Revenue has not brought any material on record to demonstrate that the grading entities imparted any technical knowledge, skill, know-how or process to the assessee. The services rendered remained confined to examination of the diamonds and issuance of independent grading/certification reports. Therefore, respectfully following the decision of the co-ordinate Bench in the assessee's own case for AYs 2013-14 and 2014-15, and having regard to the nature of the services rendered in the present appeals, we hold that the impugned payments towards diamond grading and certification charge....