The ssessee had  paid commission paid to the foreign agents. On a perusal of the MOU signed by the assessee with the agents, AO held  that the nature of services to be provided by the foreign agents are in the nature of managerial/technical services covered under S.  9(1)(viii) of the Act being paid by a resident and these are not being utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any sources outside India. Accordingly the AO held that remittances made by the assessee on account of commission to foreign agent as “sales commission”, are covered under the expression ‘Fee for Technical Services’ (FTS) as defined in S.  9(1)(vii)(b) of the Act and are to be deemed income of the payee accrued or arising in India and consequently is liable for withholding tax, and hence disallowed the expenseunder S.40(a)(i) of the Act.  On appeal the Tribunal held that  Cee-Jan Beevers is a non-resident Indian and resident of Belgium whereas  MK group LLC is a resident of USA. M/s. Cee-Jan Beevers is covered by the India Belgium Double Taxation Avoidance Agreement which if read with the protocol dated 26/4/1993 and the Treaty between India and the USA is applicable. So also case of M/s MK group LLC is covered by the Double Taxation Avoidance Agreement between India and USA. In either case the payment of commission would not be ‘Fee for Technical Services’ (FTS) since such services did not “make available” any technical knowledge, experience, skill, know-how or processes or consists of the development and transfer of technical plan or a technical design. Accordingly  the services rendered by these two foreign entities are outside India and in respect of the sales effected by them, and at the same time neither of these entities had any permanent establishment in India, not liable to deduct tax at source.  (AY. 2009-10, 2010-11)