Case Law Details
Infosys BPO Limited Vs DCIT (ITAT Bangalore)
Held that the training fee paid by the assessee to a professional trainer doesn’t amount to Fees for Technical Services and hence TDS u/s 195 not deductible
Facts-
The assessee is a company engaged in the business of rendering BPO services. The assessee made payment of 2100 US$ to a nonresident viz., Stakeholder Centered Coaching (International Ltd.,) hereinafter referred to as the ‘non-resident’. The non-resident was a tax resident of Hongkong. It is body corporate registered in Hongkong. It is undisputed that there was no Treaty for avoidance of Double Taxation (DTAA) between India and Hongkong during the relevant period i.e., period relevant to Assessment Year 2015-16. The nature of payment made by the assessee to non-resident was fee, training for developing soft skills. The amount payable to non-resident was grossed up and Tax Deducted at Source (TDS) was paid on the grossed up amount. Under section 248 of the Income Tax Act, 1916 (hereinafter called ‘the Act’), the assessee filed an appeal before the CIT(A) contending that the sum paid to the non-resident is not taxable in the hands of the non-resident in India and therefore the assessee should be given the refund of the TDS paid out of its pocket.
The CIT(A) in the appeal filed by the assessee u/s.248 of the Act, was of the view that the payment in the form of training, fees fall within the ambit of definition of FTS under the Act and is taxable in India.
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