On appeal to Tribunal, it was observed that the service provider i.e.
non-residents neither did have any permanent establishment in India nor any of its personnel stayed for more than 90 days in India during the relevant previous year. Thus, it was held that such payment of
Rs. 1.46 crores as legal and professional charges to non-resident could not be disallowed u/s. 40(a)(i) of the Act as such payments did not fulfil the conditions specified in Article 15 (Independent Personnel Service) of DTAA between India and USA and therefore, were not taxable in India. Further, it was held that the payment of Rs. 43 lakhs for obtaining assessment report from non-resident service provider does not fulfil the condition of Article 12 (Fees for technical services) of DTAA between India and Singapore and therefore not taxable in India. Thus, Tribunal upheld the order of CIT(A) in deleting the disallowances made by the AO u/s. 40(a)(i) for non deduction of tax u/s. 195 of the Act. (ITA No. 3846 & 4342/Del/2012)                                                   (AY. 2007-08)