Case Law Details
ITO Vs Macrotech Developer Ltd. (ITAT Mumbai)
ITAT Mumbai held that there is no element of technical knowledge, experience, skill knowhow or process in the rendering of brokerage services. Therefore, the payment of brokerage by the assessee to the brokers not being covered as FTS/FIS is not taxable in India either pursuant to Sec. 9(1)(vii)
Facts- Assessee is engaged in the business of land development and construction of real estate properties. The AO passed an order dated 31.07.2018 raising demand of Rs.1,29,23,408/- u/s 201(1) and interest of Rs.78,10,519/- u/s 201(1A) of the Act on account of not withholding tax u/s 195 of the Act pertaining to payment made under the Architectural Consultancy and payment for other services; Brokerage payment; and reimbursement of expenses.
CIT(A) deleted all the additions made by AO. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- In the case of Gera Development (P) Ltd. Vs. DCIT, ITAT Pune held that payments made by the assesse, India Company to US company for architectural design and drawings of different buildings and facilities could not be held as fees for technical services as mere passing of project specific architectural drawings and design with measurements did not amount to ‘making available’ technical knowledge, know or process and, consequently no TDS was deductible from said payments.
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