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| The Tax Publishers2019 TaxPub(DT) 3742 (Ahd-Trib) INCOME TAX ACT, 1961
Section 195
Where foreign agent did not impart any information concerning technical, industrial, commercial or scientific knowledge exports or skill, nor rendered any managerial technical or consultancy services commission attributable to the services rendered by them could not be regarded as royalty or fees for technical services and it was held that the same was not taxable under section 9(1)(vi)/9(1)(vii). Also, non-resident did not have any PE in India, therefore, commission income was not taxable in India and liability to withhold tax under section 195 did not arise.
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Tax deduction at source - Under section 195 - Commission paid to non-resident -
Assessee-company claimed deduction of commission paid to foreign agents. AO disallowed deduction for want of TDS under section 195. Held: Foreign agent did not impart any information concerning technical, industrial, commercial or scientific knowledge exports or skill, nor rendered any managerial technical or consultancy services. Thus, commission attributable to the services rendered by them could not be regarded as royalty or fees for technical services and it was held that the same was not taxable under section 9(1)(vi)/9(1)(vii). Also, non-resident did not have any PE in India, therefore, commission income was not taxable in India and liability to withhold tax under section 195 did not arise.
Relied:CEAT International S.A. v. CIT (1999) 237 ITR 859 (Bom) : 1999 TaxPub(DT) 1035 (Bom-HC) and GE India Technology Centre (P) Ltd. v. CIT (2010) 327 ITR 456 (SC) : 2010 TaxPub(DT) 2241 (SC) : 7 Taxmann.com 18.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 195
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