TDS u/s 195 - liability u/s 201 and 201(1A) - Fees for Technical ...

Tribunal Rules Payments for System Sales Not Fees for Technical Services; DTAA Between India and UK Applies.

March 23, 2024

Case Laws     Income Tax     AT

TDS u/s 195 - liability u/s 201 and 201(1A) - Fees for Technical Services (FTS) or not - Distribution Agreement between the assessee and the foreign company - The Tribunal examined the terms of the agreements between the parties and concluded that the payments made were not in the nature of FTS. It highlighted that the agreements primarily involved the sale of integrated systems (including hardware and software) rather than the transfer of technical knowledge or expertise. - The ITAT noted that while some technical support was provided, it did not constitute the transfer of technical know-how or expertise. - The Tribunal upheld the applicability of the DTAA between India and the UK.

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