Export commission whether managerial services taxable under fee for technical fees - Indo-Belgian DTAA - impossibility of performance

Facts:

Assessee had paid commission to foreign agents to its group company Saint Gobain, Exprover, Belgium. It was the case of the revenue who disallowed the said spend for non-deduction of TDS under section 40(a)(i). Revenue's plea was these were managerial services and hence taxable under the IT Act, 1961 vide Section 9(1)(vii) read with the DTAA. Assessee's counter was the MFN (Most favoured nation) clause benefit as per subsequent DTAA viz. Indo-UK is applicable to them besides the fact that commission payment is not managerial services taxable under fee for technical services clause of the Indo-Belgian DTAA. It was also canvassed by the assessee that the amendments made vide Explanation 2 to Section 9 retrospectively w.e.f. 01-04-1976 vide Finance Act, 2010 created a situation of impossibility of performance even if TDS was supposed to be done by the assessee as the retrospective amendment is something which no one can think of in advance. CIT(A) dropped the addition basing the above. On higher appeal by revenue - 

Held against the revenue that the commission was not taxable under the DTAA and was not managerial services. The impossibility of performance was also accepted to be correct as per law.

Applied:

TVS Electronics Ltd. v. ACIT in ITA No. 949/CHNY/2017 dated 24-09-2021 : 2021 TaxPub(DT) 5678 (Chen-Trib),

Case: JCIT & Anr. v. Saint Gobain India (P) Ltd. 2023 TaxPub(DT) 5560 (Chny-Trib)