Remuneration received for providing legal service not amount to ‘fees for technical services’

Linklaters LLP Vs Asst  Vs CIT (IT)-3(1)(2) Mumbai (ITAT Mumbai)

ITAT Mumbai held that remuneration received for providing legal services doesn’t amount to ‘fees for technical services’, where the provisions of section 9(1)(vii) of the Act is not applicable. Accordingly, the same is not taxable.

Facts- The assessee is a LLP incorporated under the laws of United Kingdom, engaged in providing legal services. The assessee is registered with the Registrar of Companies for England and Wales under the Limited Partnership Act, 2000 of the UK.

The assessee provides legal services to its clients on projects undertaken which are related to matters like mergers, acquisitions, restructuring, financing and tax, etc. The services rendered by the assessee are for drafting of documents and legal due diligence based on non Indian laws.

The assessee company filed its ROI dated 22.09.2016, declaring total income at Rs. Nil. The assessee’s case was selected for scrutiny, wherein the A.O. passed the draft assessment order dated 28.12.2019 u/s. 144C of the Act for which the assessee had filed its objection for the proposed addition/disallowances with the Dispute Resolution Panel (DRP). Subsequent to this, the A.O. passed the final assessment order u/s.143(3) r.w.s. 144C(13) of the Act dated 29.04.2021 after the DRP made the proposed adjustment duly after disposing of the objections raised by the assessee. The A.O. determined the total income at Rs.2,17,92,596/- after making the impugned additions/disallowances.

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