INCOME TAX ACT,1961

Section 9(1)(vii)

Income deemed to accrue or arise in India under section 9(1)(vii) - Agreement with India and USA - Fees for technical services -

Assessee, a foreign company incorporated under the laws of USA, it received amount from its Indian subsdiary towards Headquarter common expenses, Regional Management Assistance.It claimed that amount to be exempt under DTAA. AO considered that amount under section 9(1)(vii) and also under 'Fees for Included Services' under Article 12 of the DTAA on the basis of the direction of the DRP for earlier years. Aggrieved, assessee went to Tribunal. Assessee accepted the taxability of the amount under section 9(1)(vii) of the Act. His only challenge was to the taxability under DTAA. Held: Assessee was not only providing some services but also deputing its personnel to its Indian entity for providing expertise and knowledge to assist with specific issues as necessary. As per clauses of the Addendum to the Agreement the assessee was obliged to maintain all the necessary details and record of services and the expenses incurred thereon. Since such details , certain crucial evidence for the decision was not available on record and further certain evidence filed as additional evidence had not been examined by the authorities ,so matter was sent back to the AO/TPO for fresh determination of the issue in the light of all the relevant information/evidence.

CIT v. De Beers India Minerals (P.) Ltd. (2012) 346 ITR 467 (Kar.) : 2012 TaxPub(DT) 2504 (Karn-HC)

REFERRED :

FAVOUR : In favour of the assessee

A.Y. : 2016-17

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