Dismissing the appeal of revenue, the Tribunal held that;There is a difference between a ‘contract of work’ and a ‘contract of service’. In a ‘contract of work’, the activity is predominantly physical while in a ‘contract of service’, the dominant feature of the activity is intellectual. Fees paid with respect to a ‘contract of work’ does not constitute “fees for technical services” and consequently the assessee is not liable to deduct tax at source. (ITA No. 642/kol/2016, dt. 04.01.2017) (AY. 2012-2013)
ITO v. Emami Paper Mills Ltd. (Kol.)(Trib.); www.itatonline.org
S. 9(1)(vii) : Income deemed to accrue or arise in India-Fees for technical services-Fees paid with respect to a ‘contract of work’ does not constitute “fees for technical services” and consequently the assessee is not liable to deduct TDS.[S. 195, 201]