The assessee, a resident Indian company engaged in manufacturing boiler pressure parts and engineering...

The assessee, a resident Indian company engaged in manufacturing boiler pressure parts and engineering plants, paid ocean freight charges to a non-resident Korean logistics company, Hyupjin Shipping Co. Ltd. (HSC), for availing logistics services. The Assessing Officer treated the freight charges as royalty u/s 9(1)(vi) and made disallowances u/s 40(a)(i) for non-deduction of tax at source. The key points are: The freight charges were not royalty as the services did not confer any right to use industrial, commercial or scientific equipment. HSC did not have a permanent establishment or business connection in India, and its profits from logistics services were taxable only in Korea under Article 7 of the India-Korea tax treaty. Section 195 m..... .....

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