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TMI Blog2022 (3) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... Engines in order to identify the issues of Air inlet distortion and installation losses. The subsequent action of the assessee to carry out the improvement based on the test results given by CGTM France cannot be considered as a basis for make available services rendered by CGTM France to the assessee. Conducting the test and subsequent improvement to the engines based on test results are independent activities and cannot be considered together. As contended by the assessee, the test conducted by CGTM France cannot be independently carried out by the assessee without the support of engineers from CGTM France and hence does not satisfy the conditions of make available that the services rendered by CGTM France to the assessee. It is settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the circumstances of the case, the Learned CIT(A) has erred in upholding the reopening of assessment proceedings u/s. 147 of the Act. 3. That on the facts and in the circumstances of the case and in law, Ld.CIT(A) has erred in upholding disallowance amounting to ₹ 13,80,672 u/s 40(a)(i) of the Act. 4. That the learned CIT(A) erred in not granting TDS credit available to the company. 5. That the learned CIT(A) erred in law and facts in upholding the order of the learned Assessing Officer in levying interest under Section 234B of the Act. 6. That the Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal." 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded the following (i) Air intake Survey (ii) Engince bay, FACEC bay and oil cooling systems (iii) Engine Accessories and FADEC vibrations (iv) Measurement of gas concentration of fire extinguishing systems (v) Hot Fule tests During the year under consideration the assessee paid a sum of 477223 EUROs to CGTM for the above said technical assistance for Shakti Engince installation flight testing carried out in India and claimed he same as an expenditure. The Technical personnel of CGTM France came with their equipment/tools/testing kits to India and carried out various tests in the premises of the assessee. Relying on the provisions of the protocol governing the India France Treaty read with India Portugal Treaty, the assessee di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments made to CGTM France. 7. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. 8. The ld.AR submitted that there was no technology that was made available by CGTM France to the assessee. The ld.AR drawn our attention to para 5.6 of the CIT(A)'s order where the CIT(A) himself has mentioned that this services to be provided by CGTM France were 'Strictly Limited' to the following resources:- i) 1 operating engineer over 2 consecutive months in Bangalore ii) 1 flight engineer over 1.5 months in Bangalore iii) 1 measure dedicated technician, for 2 consecutive weeks in Bangalore iv) 1 operating engineer in our facilities Pau-France 9. The ld.AR also submitted that based on the receipt of the testing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd would carry out the requisite test for improving its engine. The fees paid towards the services in question here is purely towards the testing of Shakti Engines in order to identify the issues of Air inlet distortion and installation losses. The subsequent action of the assessee to carry out the improvement based on the test results given by CGTM France cannot be considered as a basis for 'make available' services rendered by CGTM France to the assessee. Conducting the test and subsequent improvement to the engines based on test results are independent activities and cannot be considered together. As contended by the assessee, the test conducted by CGTM France cannot be independently carried out by the assessee without the support of eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial technical skills, it has not made available the technical expertise in respect of such collection or processing of data to the assessees, which the assessee can apply independently and without assistance and undertake such survey independently. Consequently, the consideration is not assessable as "fees for technical services" In view of the above, we are of the considered opinion that fees paid by the assessee to CGTM France is not in the nature of fees for technical services and hence does not attract the provisions of sec. 195 with regard to requirement for deduction of tax at source on payment of fees for technical services of an resident outside India. As a result, no disallowance is warranted u/s 40(a)(ia) of the expenses claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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