The assessee entered into an agreement with a company in the United Kingdom and got an insurance product development on payment of \u00a3 2000 per month for the service to be rendered abroad and utilised by the assessee abroad. The agreement entered into was, inter alia, for services of evaluation, development of risk management and insurance products for the renewable energy sector for its various overseas ventures, exploring the London market for types and scope of insurance available for serious complex fraud, and providing facilitation and overseas services as part of the United Kingdom retainers\u2019 responsibilities mainly to ensure that the assessee and the international brokers used, provided and capitalised on the relationship for mutual business development. The assessee applied to the AO\u00a0 for permission to make payments to the non-resident company without deduction of tax at source under S.\u00a0195\u00a0of the\u00a0 Act\u00a0. The AO ordered deduction of tax at source from the payments at 20 per cent. under the Double Taxation Avoidance Agreement between India and the United Kingdom ([1982] 133 ITR (St.) 34). The DIT (IT) rejected the revision petition filed . On writ\u00a0 dismissing the petition, that the payments made by the assessee to the United Kingdom company were not towards fees payable in respect of services utilised in a business or profession carried out by the assessee outside India as no such business had been established at the time of such payment. The assessee was merely prospecting for such business and therefore engaged the services of the United Kingdom company as a consultant. As the assessee had not established any business, the payment would not come within the purview of the exception provided in S. \u00a09(1)(vii)(b) of the Act. According to the Double Taxation Avoidance Agreement with the United Kingdom payments of fees towards technical services could also be taxed in the Contracting State in which they arose according to the law of that State. The expression \u201cfees for technical services\u201d had been defined in article 13 paragraph (4) of the Agreement to mean payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including the provision of services offered technical or other personnel). The exception to the definition of \u201cfees for technical services\u201d in paragraph (4) had been specified in paragraph (5) of article 13 of the Agreement and none of the exceptions provided in paragraph (5) were attracted. Accordingly the rejection of revision application is up held. \u00a0( W.P.No.845 of 2012 dt 19-5 2020 (SJ)<\/p>\n
\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" S. 195 :Deduction at source – Non-resident – Income deemed to accrue or arise in India – Fees for technical services – Prospecting for business but not establishing any business – Liable to deduct tax at source- DTAA-India -United Kingdom [ S.9(1)(vii)(b), 264 , Art, 13(5) , Art , 226 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-12718","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3j8","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=12718"}],"version-history":[{"count":3,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12718\/revisions"}],"predecessor-version":[{"id":17671,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12718\/revisions\/17671"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=12718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=12718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=12718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}