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| The Tax Publishers2019 TaxPub(DT) 5950 (P&H-HC) INCOME TAX ACT, 1961
Section 195 Section 90(2), Article 12(4) India USA DTAA
Where in view of section 90(2) and clause 4(b) of Article 12 of Treaty, provisions of the Income Tax Act would stand applicable only where fees for included services are taxable only if there is a make available technical knowledge, since there was no make-available of the technical knowledge, therefore, the provisions of Act would not get attracted and accordingly, no tax was required to be deducted.
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Tax deduction at source - Under section 195 - Fees for technical services - No technical knowledge made available by the supplier of services
The assessee made payment of certain sum to its parent company towards fees for technical services without deduction of tax. AO disallowed the sum so paid. It was contended that payment made by assessee was not taxable in view of the fact that no technical knowledge was made available by the parent company. Held: In view of section 90(2) and clause 4(b) of Article 12 of the Treaty, the provisions of this Act would stand applicable only where fees for included services are taxable only if there is a make-available technical knowledge. Tribunal held that there was no make available of the technical knowledge, therefore, the provisions of Act would not stand attracted in the transactions.
REFERRED : Union of India and another v. Azadi Bachao Andolan and another (2003) 132 Taxman 373 (SC) : 2003 TaxPub(DT) 1429 (SC)
FAVOUR : In assessee's favour.
A.Y. :
IN THE PUNJAB AND HARYANA HIGH COURT
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