The Tax Publishers2020 TaxPub(DT) 4564 (Del-Trib)

INCOME TAX ACT, 1961

Section 195 Section 90

In case of non-resident assessee, Fees for professional services paid to foreign legal practitioners being individual lawyer/law firms, on behalf of assessee's clients located in India for filing of patent applications in foreign countries could be made liable to TDS under section 195 or in accordance of clause of Independent personal services in concerned DTAA.

Tax deduction at source - Under section 195 - Fees for professional services paid to foreign legal practitioners being individual lawyer/law firms, on behalf of assessee's clients located in India for filing of patent applications in foreign countries -

Assedssee claimed deduction of fees for professional services paid to foreign legal practitioners being individual lawyers/law firms, on behalf of its clients located in India for filing of patent applications in foreign countries. AO disallowed deduction for want of TDS under section 195.Held: Services were definitely qualifying as 'independent Personal services'. Therefore, wherever in DTAA there was clause of Independent personal services and, if recipient qualified, i.e., he did not have fixed base regularly available to him in source country and he did not reside for N number of days in source country, for benefit of that particular clause of DTAA, then, such income shall be taxed in the country of residence of the provider of the services and same would not be chargeable to tax in India and then on such payments there was no requirement of withholding tax under section 195.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 37(1)

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