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TMI Blog2010 (3) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... opment expenses incurred by the appellant. It is respectfully submitted that design and development services were rendered from outside India, by Babeth CIE, a foreign enterprise. Payment for services were remitted in US dollars outside India and M/s. Babeth CIE is not having any permanent establishment in India, nor any business connection. Accordingly the provisions of section 40(a) of the Income-tax Act were not attracted. The learned Commissioner of Income-tax (Appeals) is not justified in confirming the disallowance of expenses and we request you to delete the disallowance of expenses incurred on design and development. 3. That the learned Commissioner of Income-tax (Appeals) has erred in law and misdirected himself on facts in hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,14,531) as design and development charges to M/s. Babeth CIE. The payment was made out of India in US dollar. The assessee has not deducted any TDS from this payment. It is further noted by the Assessing Officer that as per the copy of invoice of M/s. Babeth CIE furnished by the assessee, it is seen that the said design and development services were rendered by their representative office, M/s. Law Feria, D192, New Friends Colony, New Delhi. It is further noted by the Assessing Officer that as per the provisions of section 40(a)(i), if fees for technical services rendered in India are payable outside India on which tax has not been deducted then the said expenditure will not be allowed. The Assessing Officer issued show-cause notice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Feria. It is also submitted that the address of D-912, New Friends Colony, New Delhi is the address of a guest house where their representative used to stay during their visit to India for few days and hence this cannot be considered as permanent establishment of the foreign party and, therefore, this payment on account of design and development charges is not an income in the hands of that party and, therefore, no TDS is deductible from this payment and consequently, the provisions of section 40(a)(i) are not applicable. He also submitted that similar payments were made in the earlier years as well as in subsequent years and there is no disallowance made in earlier years or in subsequent years. He submitted that the yearwise details of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has to pay for design and development of styles as per the details given in the bill which are done by the representative office (M/s. Law Feria), D192, New Friends Colony, New Delhi-110 065. This clearly shows that designs and development of style was done by M/s. Law Feria, New Delhi office. It is also stated by the Assessing Officer that the assessee has not furnished any documentary evidences to show that the services were rendered in Israel as claimed by the assessee in the submission and in spite of this categorical finding of the Assessing Officer, no such evidence has been furnished by the assessee before the Commissioner of Income-tax (Appeals) or before us and hence this claim of the assessee that the foreign par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submission of the learned authorised representative for the assessee that there is no disallowance on this account in earlier years or in later years, we would like to observe that no evidence has been brought on record by the assessee to show that any assessment order of such earlier year or later year was passed by the Assessing Officer under section 143(3) of the Act. There is no evidence brought on record by the learned authorised representative for the assessee that in such earlier years or later years, there was no TDS deducted by the assessee and even if in such earlier years or later years, issue has been decided by the Assessing Officer in favour of the assessee, the same is against the law, and hence it cannot debar the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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