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TMI Blog2022 (7) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... In this case M/s. GSI Engine B.V. from whom the Assessee had taken Aircraft Engine on a lease rent basis, admittedly is a tax resident of Netherland, having no PE in India and consequently cannot besubjected to taxation in India and thuspayment made to M/s GSI Engine B.V. does not attract the provisions of Act for withholding the tax, hence we are inclined to sustain the impugned order passed by the Ld. Commissioner, as the same does not suffers from any perversity, impropriety and/or illegality. Consequently, the appeal of the Revenue Department is dismissed. - ITA No. 5662/Del/2017 ITA No. 5663/Del/2017 - - - Dated:- 20-7-2022 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER Appellant by : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer further held that the engine is a part of aircraft and cannot be said to be an aircraft . Therefore, the contention of the Applicant/Assessee does not seem to be correct. The payment is being made for the rent of engine, which is covered as equipment under Article 12(4) of the DTAA between India and Netherland and is taxable as royalty @ 10%. Therefore, the payer is authorized to make maximum payment of US$65000 per month during the F.Y. 2014-15 at 10% withholding. The Assessing Officer further held that this certificate is provisional and is subject to final determination of tax at the time of regular assessment. 4. The Assessee being aggrieved with the order u/s. 195(2) of the Act, preferred first appeal before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition made by the Assessing Officer and affirmed by the ld. Commissioner, by holding as under: 13. Keeping in view the facts inter alia that engine is a part of aircraft and cannot be said to be an aircraft and payment made for rent of engine are covered under equipment as per Article 12 (4) of the DTAA between India and Neitherland; that under Article 12(4) of the DTAA between India and Neitherland, the term royalty does not cover use of, or the right to use equipment itself; that rental of aircraft engine is neither a copyright nor a payment of any information; that under Article 12(6) of the DTAA, fee for technical services also does not include the amount paid for services that are ancillary and subsidiary to the rental of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax under section 195 arises only, when the amount being paid is chargeable to tax under the Income Tax Act of India and if the person or supplier or manufacturer to whom payment made, is a tax resident of a foreign country or nonresident, having no PE in India, then such entity can not be subjected to taxation in India and consequently payment made to it not liable to deduct any TDSunder Section 195 of the Income Tax Act 1961. In this case M/s. GSI Engine B.V. from whom the Assessee had taken Aircraft Engine on a lease rent basis, admittedly is a tax resident of Netherland, having no PE in India and consequently cannot besubjected to taxation in India and thuspayment made to M/s GSI Engine B.V. does not attract the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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