CIT v .Bangalore Metro Rail Corporation Ltd. (2022)449 ITR 431 288 Taxman 539 (Karn)( HC)

S. 9(1)(vii):Income deemed to accrue or arise in India – Fees for technical services -Technical services do not include construction, assembly and design — Dominant purpose of contract was supply of passenger rolling stock —Amount received under contract could not be deemed to accrue or arise in India [ S. 194J, 201(IA) ]

Dismissing the appeals the Court held that  the contract was one for designing, manufacturing, supply, testing, commissioning of passenger rolling stock and training personnel. Dominant purpose of  contract was supply of  passenger rolling stock .Amount received under contract could not be deemed to accrue or  arise in India  Dominant purpose of  contract was supply of  passenger rolling stock. Accordingly the amount received under contract could not be deemed to accrue or  arise in India therefore the tax and interest thereon levied under section 201(1A) were not valid.( AY.2011-12)

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