Warranty obligation expenses cannot be treated as ‘fees for technical services’

Tractors and Farm Equipment Ltd. Vs DCIT (ITAT Chennai) The submissions of Ld. AR are that warranty expenditure is part of overall sales obligations and the expenditure is reimbursed on actual basis. The warranty obligation being part and parcel of sales transactions and therefore, the same could not be held to be ‘fees for technical services’. Another line of argument is that services have been carried as well as utilized outside India and therefore, there is no TDS obligation on the part of the assessee in view of the fact that the payees do not have any permanent establishment in India....