Ahmedabad ITAT imports make available clause in India- Belgium DTAA from India-USA DTAA

Facts:

a) Assessee made remittances to companies located at USA, Canada and Belgium towards technical consultancy and professional services without withholding tax in terms of section 195

b) Assessing Officer observed that the payments made to the foreign parties were in nature of included services/technical services and, thus, were taxable in India. AO held that assessee was liable to pay tax under section 201(1).

c) CIT (Appeals) held that the services would not fall within the purview of fees for technical services and, hence, there was no liability to withhold tax at source. Aggrievedrevenue filed instant appeal before the Tribunal.

Tribunal held in favour of assessee as under:

1) Because of the MFN clause, the scope of fees for technical services under the India- Canada DTAA and the India-USA DTAA was more restricted than that under India- Belgium DTAA. The language of article 12 of the aforesaid two treaties shall apply to the DTAA between India and Belgium.

2) After importing make available clause in India-Belgium DTAA, services provided by the non-resident parties would not fall within the purview of included services/technical services and, hence, there was no liability on the assessee to deduct TDS under section 195. [2017] 78 taxmann.com 330 (Ahmedabad - Trib.)