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TMI Blog2019 (7) TMI 1719X X X X Extracts X X X X X X X X Extracts X X X X ..... ot establish that any technical knowledge was made available in the process of providing services by the non-resident parties to the assessee. In absence of not making available, the technical knowledge to the assessee, in view of the Article 13 of the respective DTAAs, the payment for services cannot be held as fee for technical services under the provisions of the respective DTAAs. We do not find any error in the order of the Ld. CIT(A) on this issue also. CIT(A) has further observed that Article 13 of DTAAs provisions defining Fee for Technical Services being more favourable to the assessee as compared to the provisions of section 9(1)(vii) of the Act which has defined Fee for Technical Services, and thus the assessee was having option of choosing more favourable provisions of the DTAAs. In our opinion, the finding of the Ld. CIT(A) is in accordance with the established legal position on the issue. CIT(A) in view of the decision in the case of Van Oord ACZ India (P) Ltd versus CIT [ 2010 (3) TMI 167 - DELHI HIGH COURT] has held that the sum payable to the nonresidents was not chargeable to income tax in their hands and thus the assessee was not liable for deduction of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee relied on the order of the Ld. CIT(A) and submitted that the Ld. CIT(A) has made detailed analysis of the provisions of Article 15 of various DTAAs and found the payments made by the assessee eligible under Article 15 of the relevant DTAAs. The Ld. counsel also submitted that payments are also not Fee for Technical Services in view of the make available clause of relevant DTAAs as the consultancy provided is of routine nature and no technical knowledge has been provided to the assessee. Accordingly, she submitted that order of the Ld. CIT(A) on the issue in dispute might be upheld. 3.3 We have heard the rival submissions and perused the relevant material on record. We find that the Ld. Assessing Officer has rejected the contention of the assessee that services rendered by the 6 non-resident entities are not in the nature of independent personal services. The Ld. CIT(A) has mentioned that those parties have rendered professional services pertaining to the field of lawyering (giving reviews and opinions) and accounting e.g. SAS70 engagement, review and filing of form number1120, due diligence, review of US GAAP financials etc. We note that there is no dispute as far as the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Independent Personal Services itself that it is applicable on Income derived by a person who is an individual or firm of individuals; or by an individual, whether in his own capacity or as a member of a partnership; or by an individual or partnership of individuals. 4.2.6 In the case of Netherlands, the word resident is used in Article 14 on Independent Personal Services , and it has been explained by Clause 1 of Article 4 of the said DTAA as: For the purposes of this Convention, the term resident of one of the States means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. Further, person has been defined by Clause 1(e) as: the term person includes an individual, a company, any other body of persons and any other entity which is treated as a taxable unit, under the taxation laws in force in the respective States. 4.2.7 Thus, even in this case, Article 14 on Independent Personal Services is definitely applicable on the income derived by a partnership firm or an LLP. 4.2.8 Accordingly, the only contention of the AO in refusing to accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual, whether in his own capacity or any member of a partnership firm. Further in the DTAA with Netherland, the word resident has been used for the benefit of independent personal services, which is wider than individual and the firm, who has rendered services is entitled to benefit of said provision. In view of above, we do not find any error in the order of the Ld. CIT(A) on this issue. 3.6 Further the Ld. CIT(A) has also analysed in view of the various DTAAs that the services rendered by the those non-resident parties are not Fee for Technical Services. The relevant finding of the Ld. CIT(A) is reproduced as under: 4.3.7 Furthermore, paragraph 4(c) of Article 13 of DTAA states that the rendering of technical and consultancy services includes making available of the technical knowledge, experience or skill in India or development and transfer of a technical plan or technical design. 4.3.8 The appellant is engaged in rendering of advisory and consultancy services in lawyering and accounting fields. These services are purely individual-based services of professionals. It is not a production or manufacturing concern where technical designs or processes are involved or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the respective DTAAs. We do not find any error in the order of the Ld. CIT(A) on this issue also. 3.9 The Ld. CIT(A) has further observed that Article 13 of DTAAs provisions defining Fee for Technical Services being more favourable to the assessee as compared to the provisions of section 9(1)(vii) of the Act which has defined Fee for Technical Services, and thus the assessee was having option of choosing more favourable provisions of the DTAAs. In our opinion, the finding of the Ld. CIT(A) is in accordance with the established legal position on the issue. 3.10 Further the Ld. CIT(A) in view of the decision of the Hon ble Delhi High Court in the case of Van Oord ACZ India (P) Ltd versus CIT (2010) 323 ITR 130 (del) has held that the sum payable to the nonresidents was not chargeable to income tax in their hands and thus the assessee was not liable for deduction of tax at source on such payment under the provisions of section 195 and no disallowance under section 40(a)(i) could be made. 3.11 We find that the order of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in the same. Accordingly, we uphold the same. The grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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