Having held that the amount in question was remitted by the assessee company to ATI Technologies, Canada for certain benefits received by it in the form of services procured by ATI Technologies, Canada from Soctronics India Private Limited and provided to the assessee company, and it was not a case of either gratuitous payment made by the assessee or mere reimbursement of expenditure incurred by the ATI Technologies, Canada, the question that now arises for our consideration is what exactly is the nature of this payment. As already noted by us, almost similar view, as taken by us on this issue, has been taken by the Commissioner of Service Tax vide his order dated 23.7.2012. In their respective orders, the Assessing Officer as well as the learned CIT(A) have observed that if one were to go by the conclusion of the Commissioner of Service Tax, the amount in question paid by the assessee to ATI Technologies, Canada for services procured from Soctronics India Private Limited and made available to the assessee company will be in the nature of \u2018fee for included services\u2019 which is chargeable to tax in the hands of ATI Technologies, Canada as per the domestic law as well as India Canada DTAA. At the time of hearing before us, when this position was confronted to the learned counsel for the assessee, he has also agreed that if the case of the assessee for reimbursement of actual cost to ATI Technologies, Canada, without any profit element is not found acceptable by the Tribunal, the amount in question is liable to be treated as \u201cfee for included services\u201d, which is chargeable to tax in India in the hands of ATI Technologies, Canada as per the domestic law and India Canada DTAA. It accordingly follows that the assessee company was liable to deduct tax at source from this amount as per the provisions of S.195, and having failed do so, it has to be treated as an assessee in default under S201(1) to the extent of tax payable by ATI Technologies, Canada in India on the mount in question which is in the nature of \u201cfee for included services\u201d. We accordingly modify the order of the learned CIT(A) on this issue and sustain the order of the Assessing Officer in treating the assessee as in default under S201(1) to the extent of tax payable by ATI Technologies, Canada in India on the amount in question which is chargeable as \u2018fee for included services\u2019 alongwith interest payable thereon under S.201(1A).<\/p>\n","protected":false},"excerpt":{"rendered":"
Having held that the amount in question was remitted by the assessee company to ATI Technologies, Canada for certain benefits received by it in the form of services procured by ATI Technologies, Canada from Soctronics India Private Limited and provided …<\/p>\n