9911796707
TMI Blog2020 (3) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... y ITO (IT & TP), Bhopal. 2. The assessee has raised following grounds of appeal; 01]. That on the facts and in the circumstances of the case the Learned. CIT(A) erred in confirming the action of the assessing officer by treating the Assessee company as assessee in default in respect of non-deduction of Tax at Source u/s 195 of the Income Tax Act of Rs. 1,55,009/- in respect of payment made to M/s Korea Search of Rs. 6,01,974/- during the year under consideration and also interest charged by the A.O. u/s 201/201(lA) of the Income Tax Act of Rs. 22,718/- without properly appreciating the facts of the case and submissions made before her even when the assessee was not liable to deduct TDS on t his payment. 02]. The assessee reserve its ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any technical services. However Ld. A.O was of the considered view that the alleged payment to M/s Korea Search is the fees for technical services and thus liable for tax deduction at source u/s 195 of the Act and accordingly grossed up an amount of payment at Rs. 7,52,468/- as against Rs. 6,01,974/- paid by the assessee and computed the default of tax deducted at source at Rs. 1,55,009/- and also levied interest u/s 201(1A) at Rs. 22,718/-. 4. Aggrieved by the order of Ld. A.O assessee preferred appeal before CIT(A) but could not succeed. 5. Now the assessee is in appeal before the Tribunal. 6. Ld. Counsel for the assessee referring to the synopsis placed on record firstly briefed about the facts of the case and thereafter took us thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... team of the company. For providing this service assessee made payment of Rs. 6,01,974/- during the financial year 2015-16. Assessee did not deduct tax at source u/s 195 of the Act and obtained certificate from Chartered Accountant in Form No.15CB of the I.T. rules. When the matter was examined by the Ld. A.O he was of the view that the alleged services are technical services in nature and falls under the provisions of Section 9(1)(vii) of the Act and thus liable for deduction of tax at source u/s 195 of the Act and accordingly treated the assessee in default. 10. Now we have to examine the type of services rendered by M/s. Korea Search to the assessee company. For this we need to go through the agreement and the terms and conditions menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a placement fee according to following structure. (Annual Gross Income (AGI) includes base salary and bonus) VAT will be added unless the Client does not have legal entity in Korea (10% of placement fee) Fee rate is 13% of Annual Gross Income (AGI) of selected candidate. 11. Now before moving further we also would like to go through Section 9(1)(vii) of the I.T. Act which relates to the income by way of fees or technical services deemed to accrue arise in India. SEC. 9(1)(vii) OF THE ACT 9. (1) The following incomes shall be deemed to accrue or arise in India :- (vii) income by way o(fees (or technical services payable by- (a) the Government; or (b) a person who is a resident, except where the fees are payable in respect of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is provided by the assessee company to M/s. Korea Search which has a data base of profiles of various eligible candidates. After examining the profile and matching it with the clients job description candidates are referred to the assessee company with guarantee that if the candidates so recruited leaves the job for first 90 days from the date of employment, suitable replacement will be made at no additional cost. There is no specification for any technical expertise which the assessee company has sought from M/s. Korea Search. From all the angles the agreement shows that M/s Korea Search (which is a foreign company) have no permanent establishment in India is working only as a placement services having data base of various persons who want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which by no canon require any technical expertise. Therefore since the services in question provided by M/s. Korea Search to the assessee company do not fall in the category of fees for technical services as provided under Section 9(1)(vii) of the Act there was no liability of the assessee to deduct tax at source u/s 195 of the Act. We therefore set aside the order of both the lower authorities and direct the Revenue authorities to delete the demand raised for default of deduction of tax at source at Rs. 1,55,009/-. Interest levied u/s 201/201(1A) at Rs. 22,178/- also deserves to be deleted being consequential in nature. Ground No.1 raised by the assessee is allowed. 16. In the result appeal of the assessee stands allowed. The order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
