9911796707
TMI Blog2019 (3) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... rections of the Dispute Resolution Panel (DRP) dated 28/09/2016. 2. The assessee has raised the following grounds of appeal: "The grounds stated hereunder are independent of and without prejudice to one another. The Appellant submits as under: 1. Holding that where there is no specific Article for taxability of particular payment in the Double Taxation Avoidance Agreement (`DTAA'), the provisions of the Income Tax Act, 1961 (`the Act') would be applicable a) On the facts and in the circumstances of the case, the learned Assessing Officer (`AO') erred in law in holding and the learned Dispute Resolution Panel (`DRP') erred in law in confirming that where there is no specific Article for taxability of a particular payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny under CASS and notices u/s 143(2) and 142(1) of the Income-tax Act,1961 ['the Act' for short] calling for details were served. In compliance, the learned AR appeared from time to time and filed details. The Assessing Officer (AO), on perusal of the financial statements found that the assesseecompany has received payments towards managerial/ technical services aggregating to Rs. 2,68,96,805/- from M/s.ABB India Ltd., 3. Whereas the assessee has claimed as exempt as the same is not taxable in India as per India-United Arab Emirates (UAE) Treaty and the DTAA between India and UAE as it does not have a clause for 'Fee for Technical Services' (FTS). Hence, not taxable in India. and in the absence of an Article clause of FTS i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d final assessment order dated 25/10/2016 u/s 143(3) r.w.s. 144C(5) of the Act in pursuance of the directions of the DRP determining the total income at Rs. 2,68,96,805/-. 4. Aggrieved by the order, the assessee has filed the appeal before the Tribunal. The learned AR submitted that the AO erred in applying the provisions of section 9(1)(vii) and Explanation 2 in respect of amounts received from ABB India treating it as FTS. The learned AR emphasized that in group companies' case, the similar matter was dealt and relied on decision of M/s.ABB FZLLC vs. DCIT (166 ITD 329)(Bang) wherein the payments are held as royalty under Article 12 of the DTAA. The learned AR also supported his submissions the payments are not taxable in India as there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anent establishment in India. We found the decisions relied by the learned AR in respect of Booz & Company (ME) FZ-LLC (supra) where the amount received by the UAE group company is business income as per DTAA between India and UAE in the absence of any Permanent establishment of said company in India and such business income is no taxable in India. 7. Similarly, in the case of GECF Asia Ltd. (supra), it was considered that where a non-resident company renders services relating to industrial, commercial or scientific experience, in such a case, if those services do not involve imparting of know-how or transfer of any knowledge, experience or skill, then payment received in respect of same cannot be taxed as 'royalty' within ambit of article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A and Tax Treaty, there is no specific clause in respect of FTS and same has to be considered as business profit in the absence of such clause and permanent establishment in India, whereas the learned AR supported his arguments on non-taxability of amount but could not establish that there is no existence of Permanent Establishment in India. Therefore, as prayed by the learned AR, the disputed matter is restored to the file of the AO for the limited purpose to examine and inquiry whether there is any permanent establishment in India. In case if it is found with supporting evidence and documentation and also the assessee proves that there is no permanent establishment in India, then the assessee be granted the benefit of non-taxability. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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