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TMI Blog2019 (8) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act as well as Article 12 of Double Taxation Avoidance Agreement (DTAA) between India & USA. Assessee was therefore asked to explain the reasons for not deducting TDS while making the payment to US entity. Assessee made the submissions which were not found acceptable to the AO. AO noted that identical issue arose in assessee's own case in A.Ys. 2007-08 and his predecessor had vide order dated 06.02.2014 passed u/s 201(1A) of the Act held that assessee was liable to deduct TDS. He therefore following his Predecessor's order held that assessee was liable to deduct TDS and since assessee has failed to deduct TDS, assessee has committed a default and therefore assessee was treated as "assessee in default" as per provisions of Sec.201(1) of the Act. AO thereafter calculated the liability of the tax as per the list detailed from Pages 3 to 17 of the assessment order and determined the total income at Rs. 4,37,95,332/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dt.30.12.2016 (in appeal No.PN/CIT(A)-13/DDIT(IT-I)/11/2016-17) dismissed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now before us and has rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand raised may kindly be deleted. 7. The learned CIT(A) erred in holding that the appellant company should have deducted TDS on the training fees paid to Deere & Co. USA of Rs. 9,179,764/- on the ground that the same constituted fees for technical services under the Income Tax Act as well as under the DT AA between India and USA. 8. The learned CIT(A) failed to appreciate that the payments were made to Deere & Co. on account of web based training which did not make available any technical service and hence, the same was not taxable under Article 12 of the DTAA between India and USA and hence, there was no reason for the appellant company to deduct TDS on the said payments. 9. The learned CIT(A) erred in holding that the assessee was required to deduct TDS on the charges paid to Deere & Co. on account of reimbursement of salary of expat employees of Rs. 133,484,7261- on the ground that the said payment constituted fees for technical services and hence, the appellant company was required to deduct TDS on the said payments. 10. The learned CIT(A) erred in holding that Deere & Co. by deputing its employees to the appellant company was providing technical services to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, he pointed to Para 106 at Page 88 and with respect to salary of expat employees, he pointed to Para 110 at Page 90 of the order. He further submitted that since the facts in the year under appeal are identical to that of assessee's own case in A.Ys. 2007-08 and 2008-09 and therefore following the aforesaid order of the Tribunal, the issue be decided accordingly. Ld. D.R on the other hand did not controvert the submissions made by Ld.A.R. but however supported the order of lower authorities. 5. We have heard the rival submissions and perused the material on record. The issue in the present appeal is with respect to the payment of tax and interest received u/s 201(1) and 201(1A) of the Act on account of non-deduction of tax on the payments made by the assessee to Deere & Co., USA. We find that identical issue arose in assessee's own case in A.Ys. 2007-08 and 2008-09 in ITA Nos.905 to 908/PUN/2015 (supra) wherein the Co-ordinate Bench of the Tribunal has held that assessee is not liable to deduct the TDS on the payment. The relevant findings of the Tribunal are as under : "90. In conclusion, we hold that purchase of software by the assessee being copyrighted article is not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not involve any transfer of technology, it was held that where the onus was on Revenue authorities to demonstrate that these services too involve any transfer of technology and since that onus was not discharged, then the payment was not covered by the definition of 'Fees for Technical Services'. The facts of the said case are similar to the facts before us, wherein training availed by employees of assessee were web based services available on internet and no technical knowledge was being imparted by service provider and the Revenue has failed to demonstrate that the services did involve transfer of technology and in the absence of same, it cannot be said to be payments in the nature of Fees for Technical Services. Applying the said ratio, we hold that there was no liability upon the assessee to deduct tax at source on the aforesaid payments and hence, assessee cannot be held to be in default under section 201(1) and 201(1A) of the Act. The grounds of appeal No.6 to 8 are thus, allowed. ............................ 110. On the other hand, the learned Authorized Representative for the assessee has pointed out that factual aspects of said case were entirely different, where a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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