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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 ..... of the Income Tax Act, 1961, whereby such payments would be taxable in India and those entities shall avail relief in accordance with method for elimination or avoidance of double taxation provided in such agreement." 3. At the outset, it was brought to our notice that the similar issue has been adjudicated in the assessee's own case for the assessment year 2010-11. We have gone through the order of the Co-ordinate Bench of ITAT in the case of the assessee in ITA No. 4143/Del/2015 wherein the similar matter was taken up at ground no. 1 of that appeal and adjudicated at para no. 3 to 3.11 of the order. For the sake of ready reference, the relevant part of the said order is reproduced as under: "3. The ground number (i) to (iii) of the appeal are related to the issue of disallowance of Rs. 1,41,08,805/- under section 40(a)(i) of the Act. 3.1 Before us, the learned DR relied on the order of the Assessing Officer and submitted that Article 15 of respective DTAAs is applicable in case of individual whereas the payment has been made to various limited liability partnership firms and thus Ld. CIT(A) was not justified in deleting the disallowance. 3.2 On the contrary, the Ld. co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or office or permanent establishment (PE) of the said UK LLP in India. Therefore, in the absence of a PE / fixed base of the recipient (i.e., M/s Grant Thornton UK LLP) in India and on account of the fact that no one from the said firm had even a single day stay in India, professional fees for rendering services in UK will be taxable only in UK and not in India." 3.4 The Ld. CIT(A) has further analysed the Article 15 of DTAA in respect of USA, Netherland, and France as under: "4.2.4 It must be appreciated that the explanation of the appellant that the impugned professional services were covered under the Article on "Independent Personal Services" of DTAAs with UK and other countries was rejected by the Assessing Officer on a flimsy ground that the said Article is applicable for professional fees paid to an individual only, whether in his own capacity or as a member of a partnership, and since the recipients of professional fees in this case are Limited Liability Partnership firms (LLPs), the said Article under the relevant DTAAs did not apply in this case. 4.2.5 Needless to point out that in the case of DTAAs with USA, UK and France, it is unambiguously written in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act, 1961..." 4.2.10 Therefore, it cannot be doubted that the impugned professional fees paid are squarely covered by the provisions of Article on "Independent Personal Services" of the said DTAAs. Furthermore, it has been held in Maharashtra State Electricity Board Vs. Deputy Commissioner of Income Tax (supra) that the provisions of Article 15 being specific provisions for professional services will override the relatively general provisions of Article 13 which apply to broader category of 'managerial, technical or consultancy services'. 4.2.11 In view of the above submissions, the impugned professional fees received by the foreign Grant Thornton LLPs from the appellant is not taxable in India as per Articles on "Independent Personal Services" of the relevant DTAAs with those countries and, therefore, the same is not liable to tax deduction at source in terms of section 195 of the Act, and accordingly no disallowance of the same can be made u/s 40(a)(i) at all. 3.5 The Ld. DR could not controvert the finding of the Ld. CIT(A) that the article on " independent personal services" is applicable on income derived by a person who is an individual or firm of individuals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8; b) Sandvik Australia Pty. Ltd. Vs. DDIT (International Taxation), reported in (2013) 141 ITD 598 (Pune); c) CIT Vs. De Beers India Minerals Pvt. Ltd., reported in (2012) 346 ITR 467 (Karn.) d) ISRO Satellite Centre (ISAC), (2008) 307 ITR 59 (AAR) e) Intertek Testing Services India (P) Ltd., reported in Authority for Advance Rulings (2008) 307 ITR 418; f) BhartiAxa General Insurance Co. Ltd., reported in (2010) 326 ITR 477 (AAR); g) Cable & Wireless Networks India Pvt. Ltd., reported in (2009) 315 ITR 72; h) Invensys Systems Inc., reported in (2009) 317 ITR 438; i) Guy Carpenter & Co. Ltd. Vs. ADIT, reported in (2012) 18 ITR (Trib.) 414 (Del.) j) WNS North America Inc. Vs. ADIT (International Taxation), reported in (2013) 25 ITR (Trib.) 582 (Mum.); and k) Ernst & Young Pvt. Ltd., reported in (2010) 323 ITR 184 3.8 Before us, the Learned DR could not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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