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TMI Blog2012 (12) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... 174 - BOMBAY HIGH COURT] when a duty is cast on the payer to pay the tax at source, on failure, no interest can be imposed on the assessee - in favour of assessee. - IT APPEAL NO. 4034 (MUM.) OF 2005 - - - Dated:- 30-10-2012 - R.S. SYAL AND VIJAY PAL RAO, JJ. Mahesh Kumar for the Appellant. P.J. Pardiwalla for the Respondent. ORDER Vijay Pal Rao, Judicial Member - This appeal by the revenue is directed against the order dated 16.4.2004 of the Commissioner of Income Tax (Appeals) for the Assessment Year 2001-02. 2. The revenue has raised the following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the locational special revenues of ₹ 12,7 1,822/-is not in the nature of fees for technical services as per Article 13 of the DTAA between India and UK. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that no liability u/s 234B and 234C arise, ignoring the fact: (i) that since the tax deducted at source was not adequate to meet the entire tax liability, it was obligation on the part of the assessee to make the deficit goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rience, skill, know-how or process, or consist of the development and transfer of a technical plan or technical design. 3.3.1 Thus, it was contended that the assessee does not provide technical or managerial or consultancy services. What the assessee does is to produce a particular event, meeting etc. as required by the client and sell the film/programme as a product to the customer. Thus, the activity undertaken by the assessee is in the nature of production and the final product is made available to the client. 3.4 The Assessing Officer did not accept the contention of the assessee and observed that the assessee was asked to furnish the copies of the invoices, agreement, letters etc., with respect to the work done for the various customers; but, the assessee did not furnish any such details. Accordingly, the Assessing Officer was of the view that in the absence of any documentary evidence, one has to assume that the assessee is rendering the service of shooting a film for its customers and therefore, the said service is covered as 'fees for technical services' u/s 9(1)(vii)(b) r.w. Explanation 2 . Consequently, the Assessing Officer held that the payment of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the provisions of sec. 9(1)(vii)(b) r.w Expl. 2. He has relied upon the order of the Assessing Officer and submitted that in the absence of relevant record and particularly agreement and invoices, how it can be held that technical services was not made available. 5.1 On the other the hand, the ld Sr counsel Shri P J Pardiwalla has submitted that 'Location Special' is service wherein a customer asks the assessee to film a particular event, meeting, etc. Accordingly, the payment is for the services of making and producing the television film. The ld Sr counsel has submitted that for the financial year ended March 31, 2001 the assessee earned ₹ 1,271,822 from rendering 'Location Specials' service. Further, it is submitted that the revenues earned by the assessee by rendering 'Location Special' services to its customers does not qualify as Royalty or Fees for Technical Services (Article 13) under the Treaty. Further, ld Sr counsel has submitted that as per Article 7 of the Treat the business Profits of a United Kingdom tax resident company are taxable in India, only if it has a Permanent Establishment ('PE') in India and in such case, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, managerial or citaervice.iaTP7 does is to produce a particular event, meeting, etc. as required by the client and sell the film/program as a product to the customer. The material required to make the films like the raw stock, etc. belongs to Reuters Television Limited and a final product is made available to the client. Thus the activity undertaken by RTV is in the nature of production and a final product is made available to the client. To conclude, the Location Special Revenue received by Reuters Television Limited is in the nature of business income of Reuters Television and does not constitute fees for technical services. 5.3 He has relied upon the decision of the Tribunal in the case of Raymond Ltd. v. Dy. CIT [2003] 86 ITD 791 (Mum.) and submitted that the Tribunal has elaborately discussed and dealt with the aspect of fee for technical services for making available as per Indo-UK DTAA wherein it has been held that the making available is something more than a mere rendering of services. The ld Sr counsel has referred the finding of the Tribunal and submitted that the meaning of word 'make available' as used in Article 13 of Indo-UK treaty refers tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Non furnishing of such details amounts to concealment of certain facts from the department which could be used against the submissions made by the assessee. But for this, there was no reason why the assessee did not furnish such documents when the same were specifically called for by the undersigned. With this background of the assessee, let us now understand the nature of work of done by it. 'Locational; Service' is service wherein the customer asks the assessee to film a particular event, meeting etc. In absence of any documentary evidence as to what are the various aspects of the understanding between the assessee and its customers, one has to assume that the assessee is rendering the service of shooting a film for its customers. The said service is covered as 'fees for technical services' u/s 9(1)(vii)(b) read with explanation 2. 6.1 On appeal, the Commissioner of Income Tax(Appeals), though concurred with the view of the Assessing Officer to the extent of services provided by the assessee will qualify to be treated as fee for technical services under the provisions of sec. 9(a)(ivii)(b) r.w explanation 2 in paa 4.4.2 as under. 4.4.2 In so far as the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee is for making available television film and not for any technical know-how, skill etc., are contrary to each other at least on the point of fee for technical services. Further, the Commissioner of Income Tax(Appeals) has given a finding on the basis of submissions of the assessee without examination of any relevant record as the same was not produced by the assessee. Even before us, the assessee has not produced any documents. 6.4 Since the nature of services has to be ascertained only after examination of the relevant record and the legal point, which has been settled by the various decisions is only on the point of 'making available' of technical know-how, knowledge, expertise etc. which is again to be seen from the facts that whether any technical service is made available or not. Thus, in the absence of relevant material and particularly agreement between the parties under which the assessee has rendered the services and received the payment, it is not possible to determine the real nature of the activity carried out/services rendered by the assessee. Accordingly, in the facts and circumstances of the case and in the interest of justice, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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