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TMI Blog2015 (2) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be made u/s. 40A(1) for the reason that income is taxable in the hands of the non-residents who rendered services abroad vide paragraph 18 in the order of the ITAT reported in ( 2012 (9) TMI 285 - ITAT, CHENNAI). Similar view has been taken by ITAT Chennai Bench in the case of Mahindra Holidays & Resorts India Ltd. vs. JCIT (2013 (10) TMI 925 - ITAT CHENNAI). Therefore, in the light of the ratio of aforementioned cases, in our opinion, the AO is not correct in bringing to tax the amount of ₹ 81,45,025 in the hands of the assessee. Hence, the addition made by the Assessing Officer is directed to be deleted. Decided in favour of assessee. - ITA No. 721/Hyd/2014 - - - Dated:- 24-12-2014 - Shri P. M. Jagtap And smt. Asha vijaya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or consultancy service would be income by way of fees for technical services and would, therefore, be within the ambit of Income deemed to be accrued or arise in India . It is to be noted that under sec. 9(1)(vii)(b) the expression used is fees for services utilized in India and not the expression fee for services rendered in India. 5. The AO further observed that in the case of Elkem Technology vs DCIT (2001) 250 ITR 164 (AP), it was held that under section 9(1)(vii)(b), the expression used is fees for services utilized in India and not the expression fees for services rendered in India . If the fees are paid for services utilized by the Indian company in its business carried on by it in India, irrespective of the place where the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services in India. This amendment is proposed to take effect retrospectively from 1st June, 1976 and will, accordingly, apply in relation to the assessment year 1977-78 and subsequent years. From the above amendment also taxability of the assessee income will be determined on the basis of income arising and accruing. As per the Agreement entered with M/s Ajapa Integrated Project Management Consultant Pvt. Ltd., Chennai, the assessee was working at Nigeria, i.e., outside India, however the assessee received the contract amounts/ income in India in Indian rupees and from Indian Company only. As per the Agreement the assessee was exercised his contract work outside the country, however the assessee received the amount in India only, for h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has been decided by the Hon'ble Income Tax Appellate Tribunal B Bench, Chennai in the case of M/s. Ajapa Integrated Project Management Consultants (P) Ltd., for the Asst. Year 2007-08. The said decision is reported in 16 Taxmann.com 269 Chennai. A copy of the same has already been filed before the Commissioner of Income Tax (Appeals) during the course of hearing on 12- 12-13. The issue again came up for consideration in the case of the same assessee for Asst. Year 2008-09 and the Hon'ble ITAT A 11 Bench, Chennai, following the earlier decision in the same case(Supra) held that in respect of payments made by M/s. Ajapa Integrated Project Management Consultants (P) Ltd., to non-residents, disallowance cannot be made u/s. 40(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the amount of ₹ 81,45,025 was received in Indian currency. 11. The CIT(A) observed that the observation of the AO that though the services of the assessee were rendered outside India, the services were utilized for the Indian Company is not correct since the exception provided in Section 9(1)(vii)(b) of the Act nowhere specifies the same but clause (vii) only states that income by way of fees for technical services payable by - (b) a person who is a resident, except where the fees are payable in respect of services utilized in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India'. The assessee in this case unambiguously fulfils the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falls within the definition of fees for technical services , the commission paid would not be taxable in India as it is exempt by clause (b) of section 9(1)(vii). The CIT(A) following the two decisions viz., M/s. Ajapa Integrated Project Management Consultant Pvt. Ltd. (supra) and Mahindra Holidays and Resorts (supra) held that the AO was not justified in disallowing the consultancy charges of ₹ 81,45,025 received by the assessee for rendering services outside India i.e., Nigeria and accordingly deleted the addition. Aggrieved the Revenue is in appeal before us. 14. We have heard both the parties. We find that the assessee has submitted copy of bank account maintained outside India showing credit of his earnings in dollars. We al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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