|The Tax Publishers2020 TaxPub(DT) 5104 (Pune-Trib)
INCOME TAX ACT, 1961
Where assessee rendered IT support services but could not furnish proof of correct nature of services with the help of any Agreement, etc., following the order of Tribunal in preceding assessment year, matter was remanded to the file of AO for fresh determination of nature of service.
Income deemed to accrue or arise in India - Under section 9(1)(vii) - Fees for technical services - Assessee could not furnish correct nature of service
Assessee was a Non-Resident Company. It rendered IT support services to four entities in India. Amount received from rendering of said services was claimed not chargeable to tax as not falling within the ambit of 'Fees for technical services' under article 12 of the DTAA. AO treated such receipts as 'Fees for technical services' under section 9(1)(vii) and further came to hold that since the technology was embedded in the hardware and if the Indian entity was enabled to use the same, it amounted to “making availableâ€Ÿ technical services and know-how, etc. The same was consequently held to be covered within article 12 of the DTAA. Held: Assessee rendered IT support services but could not furnish proof of correct nature of services with the help of any Agreement, etc. It only furnished copies of certain services. In the preceding years, Tribunal had remitted the matter to the file of AO for fresh determination of nature of services. Following the precedent, matter was remmited to the file of AO for a fresh determination of the issue in accordance with the directions given by the Tribunal for the preceding years.
FAVOUR : Matter remanded.
A.Y. : 2016-17
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