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TMI Blog2011 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT MADRAS-B] which was considered in detail. A perusal of the note filed at the time of hearing also shows that the arguments on the issues had been considered and it has not been pointed out that there was any mistake apparent from record. In the circumstances, as the issues as raised in the appeal have been considered and the submissions of the assessee have also been considered while deciding the appeal no mistake apparent from the record is shown in regard to the said order. Consequently, the miscellaneous application stands dismissed. - 106 (MAD.) OF 2009 - - - Dated:- 18-7-2011 - DR. O.K. NARAYANAN, GEORGE MATHAN, JJ. R. Vijayaraghavan for the Applicant. Anirudh Rai for the Respondent. ORDER George Mathan, Judicial Member. This is a miscellaneous application filed by the assessee on 11-5-2011 against the order of the Tribunal in ITA No. 106/Mds./2009, dated 11-6-2010 for the assessment year 2004-05. 2. Shri R. Vijayaraghavan, Advocate represented on behalf of the assessee and Shri Anirudh Rai, learned CIT-DR represented on behalf of the Revenue. 3. The assessee has filed this miscellaneous application wherein it has been stated as follows : " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative, but the representatives have source the technical information in their territory and supplied the same to the assessee for the advancement of the R D in the assessee's business. Thus the source of the use of the technical information is the business of the assessee in India. The payment has been made to a non-resident by a recipient for assisting the resident in obtaining technical know-how for the improvement of the resident's product in line with the requirement of the automobile industry in the territory of the non-resident. Thus the source of the income of the non-resident is the business of the assessee in India and consequently, it would have to be held that the income of the non-residents in relation to the sources from India are the income being 'fee for technical service', which are deemed to accrue or arise in India." The Petitioner submits that section 9(1)(vii)(b) states that income by way of fees for technical services shall be deemed to accrue or arise in India, if it is payable by a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal has observed as under : "In respect of the representative Mr. JD, is to assist the assessee company along with its group in gaining access to special training, research papers and publications including current journals and magazines pertaining to the automobile industry to support the R D activity of the assessee company's group. This clearly shows that technical information is being made available to the assessee and Mr. JD did not have technical knowledge. It is true that the technical information does not belong to the representatives, but the representatives, have source the technical information in their territory and supplied the same to the assessee for the advancement of the R D in the assessee's business." The Petitioner respectfully submits that there is misconception of factual details. The Appellate Tribunal ought to have appreciated that the non-resident representatives merely assist the companies in gaining access to training and they do not undergo any training and pass on the technical information to the Petitioner. In such a scenario, the said act of representation by non-resident agents cannot be considered as making available technical services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the Appellate Tribunal in its order, restricted the discussion on the payments of export commission made to James Drutchas, USA only. The Petitioner submits that non-consideration of specific issue amounts to mistake apparent on record which requires to be rectified. (vi) Non-application of the decision of the Special Bench, Chennai in Prasad Productions The Special Bench in the case of Prasad Productions held as under: "Therefore, in our view, it is the payer who is the first person to decide whether the payment he is making bears any income character or not. Now we can visualise various situations that can arise for the applicability of section195: (a) If the bona fide belief is that no part of the payment has any portion chargeable to tax, section 195 would be totally inapplicable, (b) If the payer believes that whole of the payment is income chargeable to tax, he will be liable to deduct tax under section 195(1) of the Act. In the above decision, the Special Bench observed that the assessee should have bona fide belief that the payment is not chargeable to tax in India. However, in Page 18 of the appellate order dated 11th June, 2010, the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the payer cannot decide whether the amount is taxable or not. The CIT's decision is against the decision of the Special Bench and the SC decision in GE Technology. 2. The assessee submitted that the CIT has not considered the effect of (a) CBDT Circular No. 86, dated 7-2-2000. (b) The import of 'make available' clause under the DTAA with USA. (c) Payment was made in connection with exports-Madras High Court decision. (d) Under Article 26(3) of the DTAA between India and USA, disallowance of. In the hands of a resident, payment made to non-deduction can be made under the same conditions as if they have been paid to a resident. Disallowance of fees for technical services paid to Non-resident for non-TDS is not permissible as similar provision is not applicable to residents till later. As these issues had not been considered by the CIT, the same should have been set aside to the CIT or the Assessing Officer for consideration. 3. The Tribunal has held that the assessee did not have bona fide belief that the amount is not taxable, on the sole ground that payment is remuneration and not reimbursement. Even remuneration unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.) Ltd. v. DCIT (86 ITD 102 Mad.) SOL Pharmaceuticals Ltd. v. ITO (83 ITD 72 Hyd.) ITA Indtelesoft (P.) Ltd., In Re 267 ITR 725 AAR Withdrawal of CBDT Circular 786, dated 7-2-2000 by Circular No. 23 of 2009 is prospective: Siemens (2010-TIOL-102-ITAT-Mum.) Shakthi Raj Film Distributors v. CIT (213 ITR 20 Bom.) CIT v. Janardhana Mills (311 ITR 439 Mad.) Even if it is considered as Fees for Technical Services The Payment is in connection with exports and hence it is not deemed to accrue in India by the virtue of exclusion under section 9(1)(viib). CIT v. KKK West Germany (262 ITR 513 Mad.) Titan Industries Ltd. v. ITO [2007] 11 SOT 206 Bang. Lufthansa India Cargo (P.) Ltd. (91 ITD 133 Del.) In case of payment to the Non-Resident of USA Fees for included service as per Article 12(4)(b) means services that make available technical knowledge, experience, skill, know-how or process or technical know-how or process or consist of development and transfer of technical plan or technical design. Only technical know-how which can be utilised further by the recipient will not include other services. FICCI, IN RE [320 ITR 124 (AAR)] Anapharm Inc., In Re. (305 ITR 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the submission that the decision of the Tribunal in the case of Asianet Communications Ltd. v. Dy. CIT [2010] 38 SOT 158 (Chennai) had also not been considered. It was the submission that the order of the Tribunal was liable to be recalled. 6. In reply the learned DR submitted that all the issues which had been argued had been considered by the Tribunal and the miscellaneous application filed by the assessee was nothing but a prayer for review of the order of the Tribunal which was not permissible. 7. We have considered the rival submissions. A perusal of the miscellaneous application filed by the assessee shows that what has been raised by the assessee are fresh arguments on the issues. It is not pointing out any mistake apparent from the record. The assessee has also raised an issue that the non-application of the decision in a proper perspective would amount to a mistake apparent from record. Here we may mention that there has been no non-application of a decision in the proper perspective. It is not the argument of the assessee that the decision has not been considered. A verification of the log book also shows that the decision in the case of Asianet Communications Ltd. ..... 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