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TMI Blog2014 (1) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... HAG for clinical trials. The assessee's arrangement with CSPL which is tied up with clinical trial unit (CTU) of University of Kelmia, Srilanka stipulates to manage the relationship between CTU and its clients and to provide marketing services and advise on finance and management. As per this agreement the CSPL has arranged the research work to be done in three hospitals in Srilanka. The assessee applied for issue of certificate u/s 195(2) for non-deduction of holding tax to make remittance to one M/s Clinical Solution Pvt. Ltd. ("CSPL") in short), Colombo, Srilanka, claiming the remittance to be a business profit in the hands of the payee, which had no PE in India, in terms of Article 7 read with Article 5 of India Srilanka DTAA. It was cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s modified or cancelled. The reason of cancellation or modification, if required, shall be intimated." 2.2. Aggrieved, assessee preferred appeal to the CIT(A). raising following ground of appeal: "1. The Learned Income Tax Officer, TDS Ward 3(1), International Taxation, New Delhi ('Assessing officer') has erred in law and on the facts of the case in determining withholding tax rate of 10% against the 'Nil' withholding tax rate application submitted by the appellant for remittance of Clinical Research operational fees to M/s Clinical Solutions Pvt. Ltd., Sri Lanka. 2. The Assessing officer has erred in law and on the facts of the case in not appreciating that the activity of CSPL is in the nature of business activity and accordingly not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific clause in the DTAA regarding fee for technical or professional services, such payments are to be taxed as business profit under article 7 of the treaty. In this regard, he placed reliance on the case of Spice Telecom Vs. ITO (2008) 170 Taxman 82 (Bang.) where it was held that no tax was required to be deducted if payment for technical services was not specifically covered under DTAA. I agree with the contention of the appellant that fee for technical or professional services, such as, legal, managerial, architectural and medicine etc. are treated as business profits and taxed accordingly unless t here is a special provision in the DTGAA regarding fee from technical services. Therefore, the payments made by appellant to CSPL can on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to use industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. In view thereof, the order of assessing officer is correct and deserves to be upheld. 4. On the other hand, ld. Counsel for the assessee contends: Assessee is making the payment to CSPL who is into the business of getting the clinical research done for the hospitals and medical institutions and has a tie up with Clinical Trial Unit (CTU), the University of Kelaniya, Sri Lanka to manage the relationship between the CTU and its clients and to provide the marketing services and to provide advice on finance & management. CSPL arrange all the information on trial tests solely for Kendle or Sponsor. The inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercially manufacture or not to manufacture for this trial. 4.2. Assessee relied on following judgments: - Bharat Petroleum Corpn. Ltd. Vs. Jt. Director of Income-tax (International Taxation) 111 TTJ 375 (Mumbai Trib.); - Diamond Services International (P) Ltd. Vs. Union of India 169 Taxman 201 (Bom.); - Anapharm Inc. 174 Taxman 124 (Authority for Advance Ruling, New Delhi). 4.3. Further reliance is placed on ITAT Delhi Bench order in the case of Romer Labs Singapore Pte. Ltd. Vs. ADIT, Tax Circle 2(1), International Taxation (2013) 141 ITD 50 (Del.). In that case the facts are as under: The assessee was a resident of Singapore and was entitled for the benefit of tax treaty between India and Singapore. It was engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in Singapore. These samples were comprising of broken rice, maize, pet food, wheat gluten sodium caseinate, poultry meal, soya protein isolate, copra press cake etc. These samples were tested to detect the presence of mycotaxin. The presence of these toxins is hazardous to human and animal health. The Indian company which manufactures the dog foods regularly sent such samples to assessee for detection of such toxins prior to the utilization of these items in the manufacturing process. The expression 'make available' has been examined by various Courts. The Authority for Advance Rulings in the case of Anapharam Inc. In re [2008] 305 ITR 394/ 174 Taxman 124 (AAR- New Delhi) has held that there is some difference between section 9 and ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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