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TMI Blog2005 (10) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... see, involve common, issues regarding assessee s withholding tax liability and were heard together. As a matter of convenience, therefore, all the four appeals are being disposed of by way of this consolidate order. 2. Revenue s grievance is that the CIT(A) erred in holding that the fees paid by the assessee to the professionals abroad is "neither taxable under section 9(1)( i ) nor under section 9(1)( vii )( b ) of the Income-tax Act" and on that basis concealing the demands raised on the assessee under section 201(1) read with section 195 and under section 201(1A) read with section 195. 3. To decide these appeals, only a minimal reference to the undisputed facts is required. The assessee is engaged in the business of consultancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 201(1) read with section 195 and the consequential levy of interest under section 201(1A). Revenue is aggrieved and is in appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered the factual matrix of the case as also the applicable legal position. 5. Unlike the situations in the cases of tax treaties, where specific provisions are incorporated for the professional services and different parameters are laid down for taxability thereof in the source country, the Income-tax Act does not lay down any different treatment for the professional services under section 9(1)( vii ). This is in sharp contrast with the provisions of, e.g. , Indo-US treaty dealt with by a co-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices" and that "it is purely a case of actually rendering professional services, which are neither technical, nor consultancy nor managerial in nature". There are overlapping areas in "professional services" and in "technical, managerial or consultancy services" inasmuch a professional service can be rendered in technical managerial or consultancy field. Therefore, a service being in nature of a professional service, in the context of section 9(1)( vii ), does not affect the taxability of payment for that service. The fees is paid by the assessee, who is a resident in India, and it is not for the purpose of making a earning any income outside India or for the purpose of carrying out any business outside India. The fees is, therefore, taxabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel, however, undertakes to explain the same before the Assessing Officer in case the matter is to be restored to the file of the Assessing Officer. There are large number of countries involved and the status of taxability with respect to each agreement is to be examined separately. 9. We consider it fit and proper to remit the matter of the file of the Assessing Officer for adjudication de novo on taxability of each receipt by the foreign entity, on the touchstone of the principles set out in the relevant double taxation avoidance agreement, wherever such agreements are entered into by the Government of India. The Assessing Officer shall give due and fair opportunity of hearing to the assessee and decide the matter by way of a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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