Full Text
ITA 489/2015
PR.COMMISSIONER OF INCOME TAX-5 . Appellant
Through: Mr. Rohit Madan, Senior Standing counsel with Mr. Akash Vajpai, Advocates.
LTD Respondent AND
.
PR.COMMISSIONER OF INCOME TAX-5 ..... Appellant
Through: Mr. Rohit Madan, Senior Standing counsel with Mr. Akash Vajpai, Advocates.
LTD. .....Respondent
HON'BLE MR. JUSTICE VIBHU BAKHRU
10.08.2015
ORDER
1. In these appeals under Section 260A of the Income Tax Act, 1961 ('Act') against the order dated 19th December 2014 passed by the Income Tax ITA Nos. 489 & 491 of 2015 2015:DHC:11380-DB Appellate Tribunal ('ITAT') in ITA Nos. 210/Del/2012 and 498/Del/2012 for the Assessment Years ('AYs') 2007-08 and 2008-09, the first question projected by the Revenue is whether the ITAT has erred in deleting disallowance of Rs.2,77,62,022 made by the Assessing Officer ('AO') under Section 40 (a) (i) of the IT Act in AY 2007-08 on the ground that the services rendered by the agents to the Assessee were in the nature of fee for technical services.
2. On the said issue, the ITAT has analysed the agreements in question entered into by the Assessee with the foreign entities (agents) and concluded that the services rendered by the 'agents' were purely in the nature of advancement of the business of the Assessee which could not be categorised as managerial/technical or consultancy services. Consequently, it was held that the consideration paid by the Assessee to such agents could not be classified as fee for technical services.
3. The Court finds that the view taken by the ITAT on the interpretation of clauses of the agreements in question was a plausible one. It is also consistent with the decision of this Court in DIT v. Pan Alfa Auto Elektrik Ltd. [20141272 ITR 117 (Del) and the decision dated 29th May 2015 in ITA ITA Nos. 489& 491 of 2015 Page2of[3]
3. L[4]. 325 of 2014 (CIT v. M/s. Grup ISM). Consequently, this Court finds no substantial question arises for determination on this issue.
4. The second issue sought to be projected is whether the payments could have been made by the Assessee to the foreign entities towards tour expenses without deduction of TDS. The CIT (A) has held against the Revenue on this issue. Where the recipient of the payment is not liable to tax in India, the question of deducting tax at source on payments made to such entity does not arise.
5. The appeals are accordingly dismissed.
S. MURALIDHAR, J