YOUCLOUD DMCC,DUBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, GURUGRAM

ITA 1220/DEL/2024Status: DisposedITAT Delhi06 February 2026AY 2018-201918 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the authorities below did not examine the assessee's contentions regarding the source of income and utilization of services in the proper perspective. The Tribunal held that the chargeability to tax depends on the proper appreciation of evidence and directed a de novo reassessment by the AO.

What were the facts?

The assessee, a UAE-based company, received Rs. 1,02,54,839/- from an Indian company as Fee for Technical Services (FTS) for the assessment year 2018-19. The assessee claimed the services were rendered outside India and utilized by the Indian company's UAE branch, thus not taxable in India. The Assessing Officer (AO) initiated reassessment proceedings, treating the payment as FTS taxable in India under Section 9(1)(vii) due to the absence of an FTS clause in the India-UAE DTAA.

What were the issues?

Whether the Fee for Technical Services (FTS) received by a non-resident from an Indian company is taxable in India when the services are claimed to be rendered and utilized outside India, and the India-UAE DTAA lacks a specific FTS article.

Which sections of the Income-tax Act were involved?

Section 147,Section 144C,Section 148,Section 9(1)(vii)

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Income Tax Appellate Tribunal, DELHI BENCHES : D : NEW DELHI

Before: SHRI RAMIT KOCHAR & SHRI RAJ KUMAR CHAUHAN

PER RAMIT KOCHAR, Accountant Member:

This appeal in ITA No.1220/Del/2024 for assessment year: 2018-19 has been filed by the assessee against the re-assessment order dated 25th January, 2024 passed by the learned Assessing Officer(hereinafter called “the AO”) u/s 147 r.w.s. 144C(13) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), wherein addition to the tune of Rs.1,02,54,839/- has been made in the 1 hands of the assessee which re-assessment order u/s 147 of the Act has been passed by the AO in pursuance to the direction

The order continues below.

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