No TDS liability u/s 195 on sales commission paid to overseas subsidiary for non-technical services as same was not ‘FTS’

DCIT Vs Algonomy Software Pvt Ltd (ITAT Bangalore)

Conclusion: Sales and marketing services rendered to assessee by its US based subsidiary did not fall within the ambit of FTS as defined u/s 9(1)(vi) or Article 12 of India-US DTAA as  making available service did not make available knowledge, experience, skill etc. US-based subsidiary and other subsidiaries had to approach the assessee every time to get new customers and maintain relationship with existing customers. The test of make available as envisaged in the DTAA was therefore not satisfied.

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