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TMI Blog2017 (6) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... is not taxable under section 9(1)(i) of the Act as such assessee is under no obligation to make any deduction at source on such payments. There is no attempt before us to demonstrate as to how the learned Commissioner of Income-tax (Appeals) is wrong in holding that the provisions of section 40(a)(i) have no applications to the payment made to the non-residents in view of the non-discrimination provisions contained in article 26 of Indo French Treaty. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... law inasmuch as the learned Commissioner of Income-tax (Appeals) has erred in deleting the disallowance of ₹ 32,43,977 and ₹ 11,32,585 under section 40(a)(i) of the Act as such it is liable to be cancelled. 3. It is the argument of the learned Departmental representative that the payments made to Mrs. Patrice Dedyn (France) and Moulden Marketingh Ltd. (UK) are in the nature of marketing consultancy fees and fee for technical services within Explanation 2 thereof and fall within the ambit of section 9(1)(i) and (vii) of the Act. He submits that the learned Assessing Officer rightly rejected the contention of the assessee that article 15 of the Double Taxation Avoidance Agreement has no application because the earnings of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also the other material papers made available by way of paper book. In so far as the first contention advanced on behalf of the assessee that the payments made to the non-residents are not chargeable to tax under the Act as such there is no liability on the part of the assessee to deduct tax at source, is concerned, assessee is relying upon the orders passed by the Income-tax Officer (TDS), Ward International Taxation, New Delhi on November 29, 2005, July 14, 2006 and July 27, 2007 in respect of the financial years 2005-06, 2006-07 and 2007-08 produced at page Nos. 49, 52 and 57 of the paper book. In these orders the authorities clearly stated that the services rendered by Mr. Patrice Dedyn (France) are outside India, income is not deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out new clients. The learned Commissioner of Income-tax (Appeals) placed reliance on the decision reported in CIT v. Toshoku Ltd. [1980] 125 ITR 525 (SC) and Carborandum Co. v. CIT [1977] 108 ITR 335 (SC) for the principle that if no operations of business are carried out in taxable territories, the income accruing or arisen abroad through and from any business connection in India cannot be deemed to accrue or arise in India. Before us also the learned Departmental representative placed reliance on the decisions of the Hon'ble jurisdictional High Court in DIT v. Panalfa Autoelektrik Ltd. [2014] 227 Taxman 351 (Delhi) for the principle that commission paid to foreign agent for arranging of export sales and recovery of payments cannot be reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Treaty, as such in order to fall within these two expressions, there ought to be not only rendering of technical or consultancy services but it should involve making available technical knowledge, experience, skill, know-how or processes or development and transfer technical plan or technical design. Since the role of the non-residents in the case on hand is only to provide incremental business to the assessee from outside India being the independent representatives, their services are neither technical services nor included services, but only constitute their independent business. 9. Before us, learned authorised representative placed reliance on the decision of the Hon'ble jurisdictional High Court in Steria (India) Ltd. v. CIT [2016] 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax (Appeals), for this principle, placed reliance on the decision reported in Herbalife International India P. Ltd. v. Asst. CIT [2006] 101 ITD 450 (Delhi) and Millennium Infocom Technologies Ltd. v. Asst. CIT [2009] 309 ITR (AT) 18 (Delhi). The two decisions are applicable to the facts of the case on hand on all fours. 11. For the reasons set forth in the preceding paragraphs, we find that the reasoning adopted and the conclusions reached by the learned Commissioner of Income-tax (Appeals) are implacable and they do not warrant any interference by this Tribunal. We, therefore, upheld the same and while answering the issue in the negative, we confirm the orders of the learned Commissioner of (Appeals) and dismiss the appeals. 12. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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