DCIT, CIR 16(2), MUMBAI vs. M/S KPMG ASSURANCE AND CONSULTING SERVICES LLP, MUMBAI

This is a batch of cross-appeals and cross objections pertaining to Assessment Years 2012-2013 to 2017-2018. The facts, common to all the cross appeals and cross objections are as under.

The Assessee is engaged in providing business advisory, taxation and audit related services. In the return of income filed for the relevant assessment year(s), the Assessee claimed deduction for professional fee expenses debited to the Profit & Loss Account. The case of the Assessee was selected for regular scrutiny. During the assessment proceedings the Assessing Officer noted that the Assessee has failed to deduct tax on professional fee paid to various non-residents. According to the Assessing Officer, the professional fee paid to various non-residents was liable to tax in India in the hands of such non-residents in terms of the provisions of the Act read with the applicable articles of the corresponding Double Taxation Avoidance Agreement (for short ‘DTAA’) between India and the country of tax resident of the search non-resident(s) as (a) Fee for Technical/Included Services (for short ‘FTS’), or (b) as Other Income (in absence of Article on FTS). Thus, the Assessee was under obligation to withhold tax from professional fee paid to such non-residents in terms of Section 195 of the Act. Since the Assessee had failed to deduct tax at source from the professional fee paid to non-residents, the Assessing Officer disallowed the deduction for the same by invoking provisions contained in Section 40(a)(i) of the Act. Further, the Assessing Officer also disallowed deduction claimed by the Assessee for remittance made by the Assessee to KPMG International Co-operative, Switzerland holding that the deduction as claimed by the Assessee could not be allowed in view of Section 40(a)(i) of the Act since the Assessee has failed to deduct tax at source from the aforesaid remittances. Additionally, 25% of advertisement and promotion expenses were also disallowed by the Assessing Officer on ad-hoc basis on the ground that such expenses incurred by the Assessee promoted the brand held by the parent entity which benefitted the parent entity (and not the Assessee).

In appeal preferred by the Assessee, the CIT(A) granted substantial relief to the Assessee. The CIT(A) deleted substantial amount of disallowance made by the Assessing Officer under Section 40(a)(i) of the Act in respect of professional fee and allowed deduction as claimed by the Assessee holding that the professional fee paid to most of the non-residents was not liable to tax in India as FTS or Other Income. The CIT(A) accepted the contention of the Assessee that the professional fee was in the nature of Business Profits or income from Independent Personal Services (IPS); and in absence of a Permanent Establishment (PE) or fixed base in India, respectively, the same was not liable to tax in India. The Assessee was, therefore, not under obligation to deduct tax from the same and no disallowance under Section 40(a)(i) of the Act was warranted. The CIT(A) also allowed Assessee’s claim for deduction for remittance made to KPMG International Co-operative, Switzerland by following, inter alia, the decision of the Mumbai Bench of the Tribunal, dated 07/04/2017, in the case of Assessee for the Assessment Year 2001-2002 [ITA No. 2493/Mum/2012]. The ad-hoc disallowance of advertisement and promotion expenses was also deleted by the CIT(A) by, inter alia, placing reliance on the order passed by the first appellate authority in appeals preferred by the Assessee for the Assessment Years 2009-2010 & 2010-11, and 2011-12.

Now, both, the Revenue and the Assessee are before us in appeal/cross-objection.

We note that there is a delay of around 55 days in filing the Cross Objections. We have considered the rival submission on the application seeking condonation of aforesaid delay. It was submitted on behalf of the Assessee that filing of cross objections was necessitated on account of the judgment of the Hon’ble Supreme Court in the case of Assessing Officer (International Taxation) Vs. Nestle SA: [2024] 296 Taxman 580 (SC)/[2023] 458 ITR 756 (SC)[19-10-2023] wherein it was held that the benefit of Most Favoured Nation Clause1 [for short ‘MFN Clause’] would be available only on notification by the Government. As a result, for the purpose of challenging the disallowance made by the Assessing Officer under Section 40(a)(i) of the Act, the Assessee could no longer claim the shelter of MFN Clause for the purpose of importing into the 1 Most Favoured Nation (MFN) clause is contained in various Indian tax treaties with countries that are members of the Organisation for Economic Cooperation and Development (OECD). This clause provides for lower of rate of taxation at source on dividends, interest, royalties or fees for technical services as the case may be, or restriction of scope of royalty/fee for technical services in the tax treaty, similar to concession given to another OECD country subsequently.

During the course of hearing it was submitted that appeals/cross objections for the Assessment Year 2013-14 could be taken as lead matters, and that the findings/adjudication on issues raised in the appeals/cross objections for Assessment Year 2013-14 would apply mutatis mutandis to other appeals/cross objections for Assessment year 2012-2013, 2014-2015, 2015-2016, 2016- 2017, and 2017-2018. Accordingly, taking note of the fact that the CIT(A) has dealt with the grounds raised in all the 6 appeals pertaining to the Assessment Year 2012-2013 to 2017-2018, we proceed to take up appeals & cross objection for the Assessment Year 2013-14 as lead matters.

The appeal/cross-appeal/cross-objection for the AY 2013-14 arise from order, dated 09/05/2023, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as the ‘CIT(A)’], whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 29/03/2016, passed by the Assistant Commissioner of Income Tax -16(2), Mumbai under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

The Revenue has raised the following grounds of appeal in ITA “1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal of the respective DTAAs.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and the facts, thereby deleting the disallowance of Rs. 16,55,49,225/- under Section 40(a)(i).

On the facts and in the circumstances of the case and in law, in India.

On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the the assessee benefits KPMG International Co-operative.

The assessee craves leave to amend of alter any ground or add a new ground which may be necessary.

The Assessee has raised following grounds in the cross appeal preferred by the Revenue:

The Assessee has raised the following grounds of appeal in ITA issue to the Assessing Officer is bad in law

On the facts and circumstances of the case and in law, AO/CIT(A) erred in not appreciating that the said disallowances u/s 40(a)(i) of the Act, are covered by the Hon'ble ITAT orders in respect of Member firm of the Appellant. Accordingly, the said disallowances be deleted."

We have heard the both the sides and perused the material on record including the written submission filed by both the sides of the Assessee, as well as the Written Submissions, dated 08/02/2024, and case laws compilation filed on behalf of the course of hearing. Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; Ground No. 1 & 2 raised by the Assessee

Ground No. 1 to 4 raised by the Revenue; Cross Objection No. 1 raised by the Assessee; and Ground No. 1 & 2 raised by the under Section 40(a)(i) of the Act.

The Assessee claimed deduction for the following fee paid/payable to the non-residents aggregating to INR 11,21,42,029/-: Sl.No. Name & Country of Tax Residence Status Amount (INR) Note Ref

The Assessing Officer denied deduction for the entire amount of of the Act, the Assessing Officer made disallowance of INR of the Act.

In appeal before the CIT(A), by placing reliance upon the and its member concerns, it was contended on behalf of the Assessee that disallowance under Section 40(a)(i) of the Act was withhold tax in view of the following: (i) In respect of 6 non-resident parties? [at Sl.No. 12, 17, 19, same was not liable to tax in India in terms of Article impugned order passed by the CIT(A)] (ii) In respect of 2 non-resident parties3 [at Sl.No. 5 and 7 of professional fee were not liable to tax in India in terms of order passed by the CIT(A)]

The Revenue has raised the following grounds of appeal in ITA whether the Ld. CIT(A) was justified in deleting the of tax at source.

On the facts and in the circumstances of the case and in law, apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical DTAAs.

On the fact and in the circumstances of the case and in law, by the assessee to its associate concerns based in Israel, Philippines constitute payments for Independent Personal OF THE RESPECTIVE DTAAS.

On the facts and in the circumstances of the case and in law, independent non-resident alien contractor would constitute working with each other.

On the facts and in the circumstances of the case and in law, receipts would not constitute income chargeable to tax and NOT OBLIGED TO WITHHOLD AND ANY TAX WITHOUT APPRECIATING THE FACTS, THEREBY DELETING THE DISALLOWANCE OF RS. 16,55,49,225/- UNDER SECTION 40(A)(I).

ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) ERRED IN HOLDING THAT THE PAYMENTS MADE BY THE ASSESSEE TO KPMG FOR NAMES, MARK AND OTHER FACILITIES WHERE IN THE NATURE OF ROYAL AND CHARGEABLE TO TAX IN INDIA.

ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWING A SUM OF RS.14,31,415/- BEING 25% OF THE TOTAL ADVERTISEMENT AND PUBLICITY EXPENSES OF RS.57,25,658/ ON THE PRESUMPTION THAT A PORTION OF THE EXPENSES INCURRED BY THE ASSESSEE BENEFITS KPMG INTERNATIONAL CO-OPERATIVE.

THE ASSESSEE CRAVES LEAVE TO AMEND OF ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF

THE ASSESSING OFFICER DENIED DEDUCTION FOR THE ENTIRE AMOUNT OF INR 11,21,42,029/- HOLDING THAT THE ASSESSEE WAS UNDER OBLIGATION TO WITHHOLD TAX FROM PROFESSIONAL FEE PAID TO NON- RESIDENT UNDER SECTION 195 OF THE ACT AS THE SAME WERE CHARGEABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII) OF THE ACT DTAS AS FTS OR OTHER INCOME, RESPECTIVELY. SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX FROM THE SAME IN TERMS OF SECTION 195 OF THE ACT, THE ASSESSING OFFICER MADE DISALLOWANCE OF INR 11,21,42,029/- INVOKING PROVISIONS CONTAINED IN SECTION 40(A)(I) OF THE ACT.

IN APPEAL BEFORE THE CIT(A), BY PLACING RELIANCE UPON THE JUDGMENTS/DECISION INCLUDING THOSE IN THE CASE OF THE ASSESSEE AND ITS MEMBER CONCERNS, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT DISALLOWANCE UNDER SECTION 40(A)(I) OF THE ACT WAS NOT WARRANTED SINCE THE ASSESSEE WAS NOT UNDER OBLIGATION TO WITHHOLD TAX IN VIEW OF THE FOLLOWING: (I) IN RESPECT OF 6 NON-RESIDENT PARTIES? [AT SL.NO. 12, 17, 19, 20, 21, 22 AND 23 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO THE PARTIES WAS IN THE NATURE OF INCOME FROM IPS AND IN ABSENCE OF A FIXED BASE/PHYSICAL PRESENCE OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA IN TERMS OF ARTICLE 14/15 OF THE CORRESPONDING DTAA. [REFER TO NOTE 1 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (II) IN RESPECT OF 2 NON-RESIDENT PARTIES3 [AT SL.NO. 5 AND 7 OF TABLE IN PARAGRAPH 5 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE WERE NOT LIABLE TO TAX IN INDIA IN TERMS OF SECTION 9(1)(VII)(B) OF THE ACT FOR THE REASON THE SAME WERE UTILIZED OUTSIDE INDIA AND/OR FOR EARNING INCOME FROM SOURCE OUTSIDE INDIA. [REFER TO NOTE 3 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)] (III) IN RESPECT OF BALANCE 16 NON-RESIDENT PARTIES4 [AT SL.NO. 1 TO 4, 6, 8 TO 10, 13 TO 16, 18 AND 23 TO 24 OF TABLE IN PARAGRAPH 10.1 ABOVE] IT WAS CONTENDED THAT PROFESSIONAL FEE PAID TO SOME PARTIES WAS IN THE NATURE OF BUSINESS PROFITS AND IN ABSENCE OF A PERMANENT ESTABLISHMENT OF THE SAID PARTIES IN INDIA, THE SAME WAS NOT LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE CORRESPONDING DTAA. [REFER TO NOTE 2 AT 65 OF IMPUGNED ORDER PASSED BY THE CIT(A)]

THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "

THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THE CROSS APPEAL PREFERRED BY THE REVENUE: "1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE, THE PAYMENT OF PROFESSIONAL FEES OF RS. 19,19,086 TO A RESIDENT OF SWEDEN AND RS. 35,67.738 TO RESIDENTS OF SPAIN ARE FOR AVAILING PROFESSIONAL SERVICES RENDERED ENTIRELY OUTSIDE INDIA AND ARE NOT TAXABLE IN INDIA INDEPENDENT PERSONAL SERVICES UNDER THE RESPECTIVE TAX TREATIES WITH INDIA AND ACCORDINGLY, THE PAYMENT FOR THESE PROFESSIONAL SERVICES CONTINUES TO BE NON-TAXABLE IN INDIA.."

THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA "GROUND NO. 1 COMMISSIONER OF INCOME TAX (APPEALS) REMANDING ISSUE TO THE ASSESSING OFFICER IS BAD IN LAW

ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AO/CIT(A) ERRED IN NOT APPRECIATING THAT THE SAID DISALLOWANCES U/S 40(A)(I) OF THE ACT, ARE COVERED BY THE HON'BLE ITAT ORDERS IN RESPECT OF MEMBER FIRM OF THE APPELLANT. ACCORDINGLY, THE SAID DISALLOWANCES BE DELETED."

WE HAVE HEARD THE BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE WRITTEN SUBMISSION FILED BY BOTH THE SIDES (THOUGH THE SAME HAVE NOT BEEN REPRODUCED HEREIN FOR THE SAKE TO BREVITY AND TO AVOID REPETITION). WE HAVE ALSO TAKEN INTO OF ISSUES, PAPER-BOOK AND CASE LAWS COMPILATION FILED ON BEHALF OF THE ASSESSEE, AS WELL AS THE WRITTEN SUBMISSIONS, DATED 08/02/2024, AND CASE LAWS COMPILATION FILED ON BEHALF OF THE REVENUE TO THE EXTENT THE SAME WERE RELIED UPON DURING THE COURSE OF HEARING. GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; GROUND NO. 1 & 2 RAISED BY THE ASSESSEE

GROUND NO. 1 TO 4 RAISED BY THE REVENUE; CROSS OBJECTION NO. 1 RAISED BY THE ASSESSEE; AND GROUND NO. 1 & 2 RAISED BY THE ASSESSEE PERTAIN TO DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(I) OF THE ACT.

THE ASSESSEE CLAIMED DEDUCTION FOR THE FOLLOWING FEE PAID/PAYABLE TO THE NON-RESIDENTS AGGREGATING TO INR 11,21,42,029/-: SL.NO. NAME & COUNTRY OF TAX RESIDENCE STATUS AMOUNT (INR) NOTE REF