{"id":5052,"date":"2012-06-15T05:49:48","date_gmt":"2012-06-15T05:49:48","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=5052"},"modified":"2012-06-15T05:49:48","modified_gmt":"2012-06-15T05:49:48","slug":"kpmg-india-pvt-ltd-vs-dcit-itat-mumbai-rendering-of-services-is-not-supply-of-knowledge-or-information-to-be-royalty","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/kpmg-india-pvt-ltd-vs-dcit-itat-mumbai-rendering-of-services-is-not-supply-of-knowledge-or-information-to-be-royalty\/","title":{"rendered":"KPMG India Pvt Ltd vs. DCIT (ITAT Mumbai)"},"content":{"rendered":"<table width=\"150\" border=\"0\" align=\"right\">\n<tr>\n<td><a href=\"https:\/\/itatonline.org\/archives\/?dl_id=749\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=749&varname2=kpmg_professional_services_royalty.pdf'; }, 100)\" ><strong>Click here to download the judgement (kpmg_professional_services_royalty.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n<p><strong><br \/>\nRendering of services is not \u201csupply of knowledge or information\u201d to be \u201croyalty\u201d<br \/>\n<\/strong><\/p>\n<p>The assessee was engaged as a consultant by Essar Oil Ltd to provide consultancy services in connection with sale of its energy business. As the consultancy required <em>high level technical and industry knowledge<\/em>, the assessee engaged KPMG LLP, USA &#038; KPMG Consulting LP, Canada for rendering <em>professional services<\/em> and paid Rs. 20 lakhs &#038; Rs. 13 lakhs respectively. The AO held that the said fees constituted \u201c<em>royalty<\/em>\u201d u\/s 9(1)(vi) &#038; Article 12 and as there was no TDS, the amount was to be disallowed u\/s 40(a)(i). This was reversed by the CIT(A). On appeal by the department, HELD dismissing the appeal: <\/p>\n<blockquote><p>The professional services rendered does not fall in the definition of \u201croyalty\u201d in Article 12 of the DTAA. It was purely a <strong>professional service for consultancy<\/strong> which were rendered outside India and <strong>not for supply of scientific, technical, industrial or commercial knowledge or information<\/strong>. Thus, there was no liability to deduct TDS and consequently no disallowance u\/s 40(ia) can be made. <\/p><\/blockquote>\n<div class=\"journal2\">\n<strong>Note<\/strong>: On whether such services can be &#8220;fees for technical services&#8221; see <strong><a href=\"http:\/\/itatonline.org\/archives\/index.php\/cit-vs-de-beers-india-minerals-pvt-ltd-karnataka-high-court-to-make-available-technical-knowledge-mere-provision-of-service-is-not-enough-the-payer-must-be-enabled-to-perform-the-s\/\">De Beers<\/a><\/strong> (Kar) &#038; <strong><a href=\"http:\/\/itatonline.org\/archives\/index.php\/dit-vs-guy-carpenter-co-ltd-delhi-high-court-to-make-available-technical-knowledge-mere-provision-of-service-is-not-enough-the-payer-must-be-enabled-to-perform-the-service-himself\/\">Guy Carpenter<\/a><\/strong> (Del)\n<\/div>\n<p><!--\n\n\n\n\n\n\/\/--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The professional services rendered does not fall in the definition of \u201croyalty\u201d in Article 12 of the DTAA. It was purely a <strong>professional service for consultancy<\/strong> which were rendered outside India and <strong>not for supply of scientific, technical, industrial or commercial knowledge or information<\/strong>. Thus, there was no liability to deduct TDS and consequently no disallowance u\/s 40(ia) can be made<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/archives\/kpmg-india-pvt-ltd-vs-dcit-itat-mumbai-rendering-of-services-is-not-supply-of-knowledge-or-information-to-be-royalty\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-5052","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/5052","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=5052"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/5052\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=5052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=5052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=5052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}