9911796707
TMI Blog2016 (3) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 653 - ITAT AGRA) it had been clearly held that liability to deduct tax cannot be implemented retrospectively. The assessee had acted as per the provisions of Act that were applicable at the time of making the payment and in the case under consideration there was no liability on part of the assessee to deduct tax for the payment made. Considering the above, we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. So, confirming his order, we decide effective ground of appeal against the AO. - ITA No. 7688/Mum/2012, CO.41/Mum/2014, ITA/7688/Mum/2012,AY.-2007-08 - - - Dated:- 19-2-2016 - Sh. Rajendra, Accountant Member and Ram Lal Negi,Judicial Member For The Assessee : Shri Paras Sawala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing recruitment for the assessee, that group companies were located outside India, that the assessee had handed over the job of recruitment in foreign territories to them, that the payments were in the nature of technical services as it required technical expertise, that it was Fees for Technical Services(FTS), that as per the amended provisions of section 9(1)(vii)income would deemed to arise or accrue in India even if payment was made outside India/the services were rendered outside India. Finally, he made a disallowance of ₹ 97,95,014/-invoking the provisions of section 40(a)(ia)of the Act. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA). Before him, the assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO had not considered the provisions of section 90(2) of the Act, that as per the Article 12(4) of the Indo-USA Tax Treaty services will qualify as FDS only if it made available technical knowledge, experience, skill, know-how to the person receiving the services. After considering the submission of the assessee and the assessment order, the FAA held that the majority amount (Rs.96.43 lakhs) pertained to recruitment charges paid to overseas entities, that vide its letter dated 28.11.2009 the assessee had submitted employee-wise recruitment charges incurred during the year along with the supporting documents, that the copies of invoice raised towards search fees for recruiting employees for the services were also submitted, that the AO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TPO in his order had not disturbed the claim made by the assessee, that vide its letter dated 28.11.2009 the assessee furnished all the necessary details about the expenditure incurred, that the AO did not consider the details while finalising the assessment, that the AO had made the disallowance u/s.40(a)(i)by treating the expenditure in question as FTS as per the provisions of section 9(1)(vii)of the Act, that the auditor had not qualified the disputed amount as disallowance u/s.40(a)(i)of the Act, that AO had not proved that profit element was embedded in the payments made to the overseas entities, that payment was pure and simple reimbursement, that provisions of section 195 were not attracted for reimbursements. Here, we would like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidiaries as well as the head office organisation would not be income which would be assessable to tax. A similar view was taken in CIT vs. Stewarts Lloyds of India Ltd. (supra). We are in respectful agreement with the view expressed by the Delhi and Calcutta High Courts. In our opinion, the FAA had rightly held that section 40(a)(i)had no role to play regarding the payments made by the assessee to overseas companies. Secondly, services in the nature of recruitment or placement agency do not come under the purview of fees for included services within the meaning of Art.12(4)(b)of the DTAA. Reliance is placed on the matters of Real Resourcing Ltd. (190 Taxman 151-AAR)and IIC System(P.)Ltd.(127TTJ435).We would also like to mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
