Case Law Details
Brief of the case:
ITAT Kolkata held in the case of DCIT Vs Shri Subhotosh Majumder that the amended law of the deduction of tax at source of services which were to be utilized in India would be taxable in India would not have retrospective effect on the tax liability of withholding taxes. The tax deductor was not expected to know how the law would change in future. A retrospective amendment in law would change the tax liability in respect of an income, with retrospective effect, but it could not change the tax withholding liability, with retrospective effect. ITAT relied on the decision given by Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd Vs DIT (288 ITR 408) in which it was held that in order to bring a fees for technical services to taxability in India, not only that such services should be utilized in India but these services should also be rendered in India.
As the above case was related to the F.Y before the amendment so the retrospective amendment of only utilization in India would not be applicable in the above case.
Facts of the case:
Assessee was a patent law practitioner as an advocate specialized in Intellectual Property Laws (IPR) and renders services only in IPR services. The main claim of the assessee was that the services of assessee were utilized by its clients in India and its clients include multinationals, major corporate etc. The assessee also facilitates the filing of Patents in foreign countries for its clients and for the purpose interfaces the patent filing and granting process and deals and communicates with the foreign lawyers and law firms chosen by its clients. The assessee used to render the fees of the non-resident expert through him as the client of the assessee gave the money to the assessee and assessee in turn render to the non-resident expert.
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