Case Law Details
CPP Assistance Services Pvt Ltd Vs C.I.T (ITAT Delhi)
ITAT Delhi held that as there is no gain of technical knowledge, experience or skill, the IT support service do not fall under the definition of FTS under Article 13 of the DTAA and hence TDS not deductible on the same.
Facts- During the course of scrutiny assessment proceedings, AO noticed that the assessee has paid an amount of Rs. 5,47,90,000/- to its holding company CPP Limited, UK but has not deducted tax at source claiming that Information Support System Services availed by the assessee company do not fall under the definition of FTS under Article 13 of the DTAA.
Accordingly, a show cause notice was issued asking the assessee to show cause as to why provisions of section 40(a)(i) should not be attracted and the amount of Rs. 5,47,90,000/- be added back to the total income.
AO concluded by holding that the assessee company was liable to withhold tax while making the payment of Rs. 5,46,31 ,534/- and failing to do so attracted the provisions of section 40(a)(i) of the Act and added back the expenditure of Rs. 5,46,31 ,534/-. The assessee carried the matter before the ld. CIT(A) but without any success. Being aggrieved, the present appeal is filed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
