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Case Law Details

Case Name : Organising Committee for Winter Games, 2009 Vs DCIT (ITAT Delhi)
Appeal Number : ITA No.2941/Del/2015
Date of Judgement/Order : 10/12/2018
Related Assessment Year : 2011-12
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Organising Committee for Winter Games, 2009 Vs DCIT (ITAT Delhi)

Conclusion: Since the title in goods passed from foreign suppliers to assessee outside India at the port of shipment and AO failed to show as to how income of foreign parties was chargeable to tax in India, therefore,  no income had accrued to foreign parties in India in terms of section 5 and section 9, therefore, section 195 did not apply to payments.

Held: Assessee – society was registered for the purpose of organising the winter games. During the course of assessment proceedings, AO noted that payments were being made to certain foreign companies for EPC contract (Engineering Procurement and Construction) and technical consultancy contract and no TDS was deducted by assessee, against such payment.  A.O. observed there were 3 companies in consortium i.e. M/s P SA, M/s S SPA and M/s S Pvt. Ltd. with M/s P as the lead member and under the contract with M/s S SPA, various equipment was also supplied along with a various services, support services engineering details, project management, supply of software and hardware of snow tern, control panels, project drawings and project management to complete the now making system along with manpower assistance for erection work supervision commissioning, training and maintenance. A.O. therefore, observed that from the above scope of work it was clear that what these companies had executed for assessee was covered under the term technical services as defined in section 9(1) (vii), as fees for technical services and therefore, he held that it was a contract in which the provisions of section 195 was applicable and TDS @ 10% should have been made in this case. It was held  assessee had furnished bills raised by foreign parties  and had also been paid by  assessee. The bills had also been raised by those parties on assessee itself, and payments were also made as advances through letter of credits. On perusal of various bills, it was apparent that goods had been shipped by those parties from outside India and title in goods had passed from suppliers to assessee outside India at the port of shipment. AO failed to show as to how income of foreign parties who supplied equipments was chargeable to tax in India. It was apparent that no income had accrued to foreign parties in India in terms of section 5 and section 9, therefore, section 195 did not apply to payments.

FULL TEXT OF THE ITAT JUDGEMENT

Challenging the order dated 25.2.2015 in Appeal No.166/2013-14, passed by the Learned Commissioner of Income Tax (Appeals)-Dehradun (Ld. CIT(A)), assessee preferred this appeal.

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