ITAT ruled no TDS obligation existed under s.195 for payments ...

Foreign Company's Advisory Services Payment Not Subject to TDS Under Section 195 Due to Lack of PE

February 1, 2025

Case Laws     Income Tax     AT

ITAT ruled no TDS obligation existed under s.195 for payments made to Singapore-based SCPL for advisory/consultancy services. The tribunal determined SCPL lacked a Permanent Establishment in India, as both the assessee and recipient were non-residents. The payment constituted commission for financial services rather than royalty or technical services under Article 12 of India-Singapore DTAA. Key findings emphasized that temporary residence of a director doesn't establish key management decisions occurred in India. The income accrued outside India, and without a PE, was not assessable as business profit or royalty. The arbitrary 55:45 apportionment between India and Singapore by AO was rejected, upholding CIT(A)'s findings and dismissing revenue's appeal.

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