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TMI Blog2024 (11) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has paid marketing fees to the payees. In such a case, in our opinion, the make available condition would not be applicable at all. The arguments of Ld. AR are multifold i.e., these services do not constitute Fees for Technical services since these are more of commission agent services which have been rendered in foreign territory. Since both the payees do not have any PE in India, the same would not be taxable in India in terms of cited judicial decisions. Another argument of Ld. AR is that the impugned payments would be business profits for the payees and therefore, the same, as per the terms of applicable DTAAs, would be taxable in Singapore and US only. The terms of DTAA or the provisions of the Act, whichever are more ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) erred in confirming the disallowance under section 40(a)(i) r.w.s. 195 and 9(i)(vii) of the Act 3.1 The Commissioner of Income tax (Appeals) erred in confirming the treatment of marketing fees paid to Natronix Singapore and SPEL America as 'fees for technical services'. 3.2 The Commissioner of Income tax (Appeals) should have found that the nature of work of Natronix Singapore and SPEL America is that of a commission agent simpliciter and not managerial or technical in nature. 3.3 The Commissioner of Income tax (Appeals) ought to have taken cognizance of the DTAA between India and Singapore and ought to have noted that marketing fees will not be liable to TDS u/s 40(a)(i). 3.4 The Commissioner of Income tax (Appeals) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is disallowance made by Ld. AO u/s 40(a)(i) for want of TDS on certain payments. 2. The Ld. AR advanced arguments and filed written submissions. The Ld. Sr. DR also advanced arguments supporting the case of the revenue. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. The assessee being resident corporate assessee is stated to be engaged in semi-conductor IC assembling and testing. The brief facts of the impugned issues are as under: - 3. Payment to M/s Natronix Semiconductor Technology Pvt. Ltd., Singapore (NSTPL) for Rs. 106.31 Lacs 3.1 The assessee paid marketing fees to this entity without deducting tax at source. The same was in pursuant to Marketing and Sale agreement as entered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the field of marketing / managerial services and rendering of such services was critical to the business of the assessee as carried out in India. Reliance was placed on the decision of Hon ble High Court of Madras in the case of Regan Powertech Pvt. Ltd. (110 Taxmann.com 55) to support it conclusion. The assessee s reliance on the terms of DTAA was also rejected on the ground that the service involve specialized knowledge and strategy which results in benefit to the taxpayer in relation to the business carried on in India. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 6. The Ld. AR has submitted that that both payments were in the nature of payments to foreign agents for marketing sales which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , N-sg shall be solely responsible to develop materials, develop demographic customer profiles, and coordinate all service efforts through all available channels. In addition to the foregoing, N-sg shall provide such advice, assistance and any other services as SPEL-ln Et N-sg may agree from time to time during the term of this Agreement Between Appellant and SPEL USA 4.Marketing Plan SPEL America shall develop and carryout a carryout a marketing campaign as it deems necessary or advisable or advisable in its sole discretion. In this regard, SPEL America shall be solely responsible to develop marketing materials, develop demographic customer profiles and coordinate marketing efforts through all available channels. In addition to the foregoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, whichever are more beneficial to the assessee, would apply. All these arguments as stated by Ld. AR need to be re-examined by lower authorities. The terms of the agreement, nature and place of services rendered would be decisive factors to ascertain the nature of payment. Beside this, the finding that whether the payees have PE in India or not, would also be vital to adjudicate the issue. Therefore, we set aside the impugned order and restore the impugned issue back to the file of Ld. AO for de novo adjudication in terms of various arguments as advanced by Ld. AR. All the issues are kept open. The assessee is directed to substantiate its case. 9. The appeal stand allowed for statistical purposes. Order pronounced on 18th October, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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