Case Law Details
DIT Vs Jeans Knit Pvt. Ltd. (Karnataka High Court)
From the agreement executed by the assessee with the non-resident company, it is evident that the non-resident company is required to inspect the quality of fabric and other accessories in accordance with the sample approved by the assessee and coordinate with the suppliers to ship the goods within stipulated date. The services have been described in the agreement dated 01.03.2006 as information and tracking services. Under the agreement, the non-resident company is required to ensure coordination with the suppliers, so that goods are shipped on time and to undertake necessary coordination and ensure that correct quantity and quality of goods are shipped to assessee. It is pertinent to mention here that the assessee in consultation with the exporters identifies the manufacturers as well as the quality and price of the material to be imported. The non-resident company is no where involved either in identification of the exporter or in selecting the material and negotiating the price. The quality of material is also determined by the assessee and the non-resident Indian company is only required to make physical inspection to see if it resembles the quality specified by the assessee. For rendering aforesaid service, no technical knowledge is required. The tribunal on the basis of meticulous appreciation of evidence on record, has recorded a finding that non-resident company is not rendering any consultancy service to the assessee. Therefore, the same would not fall within the services contemplated under Section 9(1)(vii) of the Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2007-08.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
