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2017 (2) TMI 638 - ITAT KOLKATATDS u/s 195 - payments made to the non-residents for dismantling and sea worthy packing of paper mill machinery are payments made for “fees for technical services” - DTAA between India and Poland - assessee in default - Held that:- There is a difference between ‘Contract of work and ‘Contract of service’. The two words convey different ideas. In the 'Contract of work' the activity is predominantly physical; it is tangible. In the activity referred as 'Contract of service', the dominant feature of the activity is intellectual, or at least, mental. Certainly, 'Contract of work' also involves intellectual exercise to some extent. Even a gardener has to bestow sufficient care in doing his job; so is the case with a mason, carpenter or a builder. But the physical (tangible) aspect is more dominant than the intellectual aspect. In contrast, in the case of rendering any kind of 'service', intellectual aspect plays the dominant role. In the case under consideration, the scope of work mentioned in the agreement clearly explains that it is ‘contract of work’ to dismantle the machinery, therefore, it is not a ‘contract of service’ hence payment by the assessee is not for technical services, therefore, the assessee company is not liable to deduct TDS. Thus we are of the view that dismantling of machinery does not require any technical services, therefore, the present case does not fall in the ambit of fees for technical services and the assessee company does not require to deduct TDS. - Decided in favour of assessee
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