Wednesday, 29 August 2018

ITAT : No TDS on 'scientific services' of Non-resident individuals; Article 14 to prevail over Article 12

Delhi ITAT holds that payment made by assessee company to individuals (resident of Germany and Switzerland)  for AY 2008-09 and 2009-10 cannot be taxed as 'fees for technical services' under Article 12 of India Germany and India Switzerland DTAA, TDS u/s 195 inapplicable; Perusing the evidence in the form of copies of trials conducted by NR, email exchanges and working protocol, ITAT holds that services rendered were 'independent scientific services' falling under Article 14 - 'independent personal services', but same cannot be brought to tax in India absent a fixed base in India or non-resident recipients staying in India for 120 days or more; Rejects Revenue's contention that services would fall under Article 12, holds that Article 14 being a more specific provision applicable to professional services provided by individuals, it would prevail over general provisions under Article 12 which applies to all types of taxpayers; Also rejects Revenue's reliance on earlier year ruling in assessee's own case where applicability of Article 14 was rejected as assessee failed to prove that services were independent scientific services, notes that in the year under consideration, assessee had provided enough evidence to prove the nature of services provided by non-resident individuals:ITAT

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