M/s. Poddar Pigments Ltd., New Delhi V. ACIT, New Delhi

ITA 5259/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2714 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL SENIOR
• Keywords: Double taxation relief; Permanent establishment; Set aside
• Section: 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5259/DEL./2016 (ASSESSMENT YEAR : 2013-14) M/S. PODDAR PIGMENTS LTD., VS. ACIT, CIRCLE 20 (1 ), A 283, GROUND FLOOR, NEW DELHI. OKHLA INDUSTRIAL AREA, PHASE I, NEW DELHI 110 020. (PAN : AAACP1125E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL, CA REVENUE BY : SHRI SURENDER PAL, SENIOR DR DATE OF HEARING : 12.06.2019 DATE OF ORDER : 14.06.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. PODDAR PIGMENTS LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.08.2016 PASSED BY THE C OMMISSIONER OF INCOME-TAX (APPEALS)-7, NEW DELHI QUA THE ASSESS MENT YEAR 2013-14 ON THE GROUNDS INTER ALIA THAT :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMI NG THE ACTION OF THE AO IN MAKING DISALLOWANCE OF RS.11,77,391/- AND RS.10,16,330/- U/S 40(A)(I) BY ITA NO.5259/DEL./2016 2 HOLDING THAT PAYMENT TO DR. WERNER STIBAL AND HANS PETER MEYER RESPECTIVELY IS A PAYMENT TOWARDS 'FEES FOR TECHNICAL SERVICES' UNDER ARTICLE 12 OF DTAA WITH S WISS CONFEDERATION AND THUS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 195. HE HAS FURTHER ERRED IN NOT ACCEPTI NG THE CONTENTION OF THE ASSESSEE THAT PAYMENT IS FOR' INDEPENDENT PERSONAL SERVICES' UNDER ARTICLE 14 OF THE SAID DTAAS AND THUS NOT LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 195. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS IN TH E BUSINESS OF MANUFACTURING OF MASTER BATCHES AND ENGINEERING PLA STICS COMPOUNDS. AO NOTICED THAT THE ASSESSEE HAS MADE P AYMENT OF RS.21,93,721/- ON ACCOUNT OF TECHNICAL FEES TO NON- RESIDENTS, NAMELY, DR. WERNER STIBAL AND HANS PETER MEYER OF S WITZERLAND, BOTH SCIENTISTS. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE THAT THE PAYMENT MADE TO THE SCIENTISTS UNDER THE A RTICLE 14 OF DTAA WITH SWITZERLAND IS A PAYMENT MADE PURELY ON A CCOUNT OF SCIENTIFIC ACTIVITIES RELATING TO THE EXISTING BUSI NESS AND BY FOLLOWING THE ASSESSMENT ORDER FOR AYS 2008-09 TO 2 012-13, AO PROCEEDED TO DISALLOW AN AMOUNT OF RS.21,93,721/- A ND MADE ADDITION THEREOF TO THE TOTAL INCOME OF THE ASSESSE E. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION MADE BY THE AO BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSES SEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. ITA NO.5259/DEL./2016 3 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNE D ORDER CONTENDED THAT PAYMENT MADE TO DR. WERNER STIBAL AN D HANS PETER MEYER CANNOT BE TREATED AS FEE FOR TECHNICAL SERVIC ES UNDER ARTICLE 12 OF DTAA TO MAKE IT LIABLE FOR FEE FOR TECHNICAL SERVICES COVERED BY EXPLANATION 2 TO SECTION 195 OF THE ACT; THAT ID ENTICAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY T HE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.5083, 5084, 5085 & 5086/DEL/2014 ORDER DATED 23.08.2018 . HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED UP ON THE ORDER PASSED BY THE LD. CIT (A) AND DECISION RENDERED BY HONBLE SUPREME COURT IN CASE CITED AS GVK INDUSTRIES LTD. VS. ITO 371 ITR 453, DIRECTOR OF INCOME-TAX VS. RIO TINTO TECHN ICAL SERVICES (2012) 17 TAXMANN.COM 70 (DELHI) AND CENTRICA INDIA OFFSHORE (P.) LTD. 364 ITR 336 (DELHI) . 6. UNDISPUTEDLY, ASSESSEE BEING ENGAGED IN MANUFACT URING OF MASTER BATCHES AND ENGINEERING PLASTIC COMPOUNDS MA DE PAYMENT OF RS.11,77,391 AND RS.10,16,330/- TO DR. WERNER ST IBAL AND HANS PETER MEYER RESPECTIVELY, BOTH SCIENTISTS AND NON-R ESIDENT INDIANS, ITA NO.5259/DEL./2016 4 RESIDING IN SWITZERLAND. IT IS ALSO NOT IN DISPUTE THAT SERVICES HAVE BEEN RENDERED BY DR. WERNER STIBAL AND HANS PETER M EYER AS PER AGREEMENTS DATED 01.06.2012 AND 24.10.2012, , AVAIL ABLE AT PAGES10 TO 16 AND 17 TO 23 OF THE PAPER BOOK. IT I S ALSO NOT IN DISPUTE THAT THE PAYMENT HAS BEEN MADE TO DR. WERNE R STIBAL AND HANS PETER MEYER WITHOUT DEDUCTING TAX AT SOURCE BY TAKING SHELTER IN THE PROVISIONS CONTAINED UNDER ARTICLE 14 OF THE DTAA OF THE SWITZERLAND BY THE ASSESSEE AS THEY ARE HAVING NO F IXED PERMANENT ESTABLISHMENT (PE) IN INDIA NOR THEIR PERIOD OF STA Y IN INDIA WAS 183 DAYS OR MORE. 7. AO/LD. CIT (A) BY INVOKING THE EXPLANATION 2 TO SECTION 195 OF THE ACT TREATED THE PAYMENT MADE TO DR. WERNER S TIBAL AND HANS PETER MEYER AS PAYMENT FOR TECHNICAL SERVICES COVER ED UNDER ARTICLE 12 OF DTAA AND NOT UNDER ARTICLE 14 OF DTAA AS CONTENDED BY LD. AR FOR THE ASSESSEE. 8. COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2008-09, 2009-10, 2010-11 AND 2011-12 VIDE ORDE R DATED 23.08.2018 , AVAILABLE AT PAGES 26 TO 55 OF THE PAPER BOOK, AC CEPTED THE CONTENTION RAISED BY THE LD. AR FOR THE ASSESSE E THAT THE SERVICES RENDERED BY DR. WERNER STIBAL AND HANS PET ER MEYER ARE NOT COVERED BY ARTICLE 12 OF DTAA RATHER THESE ARE COVERED UNDER ARTICLE 14 OF THE DTAA BY RETURNING FOLLOWING FINDI NGS :- ITA NO.5259/DEL./2016 5 21. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND P ERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE IDENTICAL ISSU E HAS BEEN DECIDED BY US IN THE APPEAL OF THE ASSESSEE FOR ASS ESSMENT YEAR 2008-09 WHEREIN, WE HAVE HELD THAT SUCH SERVICES AR E COVERED BY THE PROVISION OF SECTION 9(1)(VII) OF THE ACT AND A LSO BY VIRTUE OF ARTICLE 14 OF THE DTAA SUCH SUM ARE CHARGEABLE TO T AX IN GERMANY AND HENCE, NO TAX IS REQUIRED TO BE WITHHEL D UNDER SECTION 195 OF THE ACT. FOR THE SIMILAR REASONS, WE DIRECT THE LD ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF RS. 268980/- U/S 40(A)(I) WITH RESPECT TO PAYMENT MADE TO DR. U THIE LE. 22. THE SECOND ISSUE INVOLVED IN THE SAME GROUND I S WITH RESPECT TO DISALLOWANCE U/S 40(A)(I) OF RS. 1082175 /- MADE TO DR. WERNER STIBAL WHO IS RESIDENT OF SWISS CONFEDERATIO N WHO PROVIDED PROFESSIONAL SERVICES TO THE ASSESSEE. THE LD ASSESSING OFFICER NOTED THAT SIMILAR SERVICES WERE PROVIDED B Y THE SWISS NATIONAL AND WHERE THERE IS SPECIFIC ARTICLE 12 FOR FEES FOR TECHNICAL SERVICES IT HAS TO BE CONSIDERED IN THAT ARTICLE ONLY. THEREFORE, HE REJECTED THE CLAIM OF THE ASSESSEE TH AT THE INCOME OF THE FOREIGN NATIONAL FALLS UNDER THE ARTICLE 14 OF DTAA AND NO TAX IS REQUIRED TO BE DEDUCTED. THE LD CIT(A) ORIGI NALLY MISSED THE ISSUE AND FAILED TO DECIDE ON MERIT AND SUBSEQU ENTLY HE RECTIFIED HIS ORDER ON 08.08.2014 CONFIRMING THE VI EW OF THE LD ASSESSING OFFICER. 23. THE LD AR REPEATED THE SAME ARGUMENT WHICH WER E ADVANCED BEFORE THE LD LOWER AUTHORITIES AND THE LD DR SUPPORTED THE ORDER OF THE LD LOWER AUTHORITIES. 24. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS UNDISPUTED FACTS THAT SERVICES HAVE BEEN PROVIDED BY AN INDIVIDUAL W HICH ARE IN THE NATURE OF INDEPENDENT SCIENTIFIC SERVICES . ACCORDING TO THE ASSESSEE IT FALLS UNDER ARTICLE 14 OF THE DTAA WHER EAS REVENUE IS OF THE VIEW THAT IT FALLS UNDER ARTICLE 12 OF THE D TAA. 25. ARTICLE 14 OF THE INDIA SWISS DTAA IS AS UNDER :- ARTICLE 14 INDEPENDENT PERSONAL SERVICES 1. - INCOME DERIVED BY A RESIDENT OF A CONTRACTING STATE IN RESPECT OF PROFESSIONAL SERVICES OR OTHER ACTIVITIES OF AN INDEPENDENT CHARACTER SHALL BE TAXABLE ONLY IN THAT STATE EXCEP T IN THE FOLLOWING CIRCUMSTANCES, WHEN SUCH INCOME MAY ALSO BE TAXED IN THE OTHER CONTRACTING STATE : (A) IF HE HAS A FIXED BASE REGULARLY AVAILABLE TO HIM IN THE OTHER CONTRACTING STATE FOR THE PURPOSE OF PERFORMI NG HIS ACTIVITIES; IN THAT CASE, ONLY SO MUCH OF THE INCOM E AS IS ITA NO.5259/DEL./2016 6 ATTRIBUTABLE TO THAT FIXED BASE MAY BE TAXED IN THA T OTHER STATE; OR (B) IF HIS STAY IN THE OTHER STATE IS FOR A PERIOD OR PERIODS AGGREGATING 183 DAYS OR MORE IN ANY 12 MONTH PERIOD COMMENCING OR ENDING IN THE FISCAL YEAR CONCERNED; IN THAT CASE, ONLY SO MUCH OF THE INCOME AS IS DERIVED FROM HIS ACTIVITIES PERFORMED IN THAT OTHER STATE MAY BE TAXED IN THAT OTHER STATE. 2. THE TERM 'PROFESSIONAL SERVICES' INCLUDES ESPEC IALLY INDEPENDENT SCIENTIFIC, LITERARY, ARTISTIC, EDUCATI ONAL OR TEACHING ACTIVITIES AS WELL AS THE INDEPENDENT ACTIVITIES OF PHYSICIANS, LAWYERS, ENGINEERS, ARCHITECTS, SURGEONS, DENTISTS AND ACCOUNTANTS.] 26. ARTICLE 12 OF THE INDO SWISS DTAA IS AS UNDER :- [ARTICLE 12] ROYALTIES AND FEES FOR TECHNICAL SERVICES 1. - ROYALTIES AND FEES FOR TECHNICAL SERVICES ARIS ING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTH ER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. HOWEVER, SUCH ROYALTIES AND FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE AND ACCORDING TO THE LAWS OF THAT STATE; BUT IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR TECHNICAL SERVIC ES IS A RESIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL NOT EXCEED 10 PER CENT OF THE GROSS AMOUNT OF THE ROYAL TIES OR THE FEES FOR TECHNICAL SERVICES. 3. THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE ME ANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FO R THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF A LITERARY, A RTISTIC, OR SCIENTIFIC WORK, INCLUDING CINEMATOGRAPH FILMS OR W ORK ON FILM, TAPE OR OTHER MEANS OF REPRODUCTION FOR USE IN CONN ECTION WITH RADIO OR TELEVISION BROADCASTING, ANY PATENT TRADEM ARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR THE USE OF, OR THE RIGHT TO USE, ANY INDUSTRIAL, COMMERCIAL, OR SCIENT IFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIA L OR SCIENTIFIC EXPERIENCE. 4. FOR PURPOSES OF THIS ARTICLE THE TERM 'FEES FOR TECHNICAL SERVICES' MEANS PAYMENTS OF ANY KIND TO ANY PERSON IN CONSIDERATION FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES, INCLUDING THE PROVISION OF SE RVICES BY TECHNICAL OR OTHER PERSONNEL. ITA NO.5259/DEL./2016 7 5. NOTWITHSTANDING PARAGRAPH 4, 'FEES FOR TECHNICA L SERVICES' DOES NOT INCLUDE AMOUNTS PAID: (A) FOR TEACHING IN OR BY EDUCATIONAL INSTITUTIONS ; (B) FOR SERVICES COVERED BY ARTICLE 14 OR ARTICLE 15, AS THE CASE MAY BE. 6. THE PROVISIONS OF PARAGRAPHS 1 AND 2 SHALL NOT APPLY IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR T ECHNICAL SERVICES, BEING A RESIDENT OF A CONTRACTING STATE, CARRIES ON BUSINESS IN THE OTHER CONTRACTING STATE IN WHICH THE ROYALTIES OR F EES FOR TECHNICAL SERVICES ARISE, THROUGH A PERMANENT ESTAB LISHMENT SITUATED THEREIN, OR PERFORMS IN THAT OTHER STATE I NDEPENDENT PERSONAL SERVICES FROM A FIXED BASE SITUATED THEREI N, AND THE CONTRACT IN RESPECT OF WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE PAID IS EFFECTIVELY CONNECTED WITH SUC H PERMANENT ESTABLISHMENT OR FIXED BASE. IN SUCH CASE, THE PROV ISIONS OF ARTICLE 7 OR ARTICLE 14, AS THE CASE MAY BE, SHALL APPLY. 7. ROYALTIES AND FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARISE IN A CONTRACTING STATE WHEN THE PAYER IS T HAT STATE ITSELF, A POLITICAL SUB-DIVISION, A LOCAL AUTHORITY OR A RE SIDENT OF THAT STATE. WHERE, HOWEVER, THE PERSON PAYING THE ROYALT IES OR FEES FOR TECHNICAL SERVICES, WHETHER HE IS A RESIDENT OF A C ONTRACTING STATE OR NOT, HAS IN A CONTRACTING STATE A PERMANENT ESTA BLISHMENT OR A FIXED BASE IN CONNECTION WITH WHICH THE LIABILITY TO PAY THE ROYALTIES OR FEES FOR TECHNICAL SERVICES WAS INCURR ED, AND SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE BORNE BY SUCH PERMANENT ESTABLISHMENT OR FIXED BASE, THEN SUCH RO YALTIES OR FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARIS E IN THE STATE IN WHICH THE PERMANENT ESTABLISHMENT OR FIXED BASE IS SITUATED.] 8. WHERE, BY REASON OF A SPECIAL RELATIONSHIP BETW EEN THE PAYER AND THE BENEFICIAL OWNER OR BETWEEN BOTH OF T HEM AND SOME OTHER PERSON, THE AMOUNT OF THE ROYALTIES OR F EES FOR 1 [TECHNICAL] SERVICES PAID EXCEEDS THE AMOUNT WHICH WOULD HAVE BEEN PAID IN THE ABSENCE OF SUCH RELATIONSHIP, THE PROVISIONS OF THIS ARTICLE SHALL APPLY ON THE LAST MENTIONED AMOU NT. IN SUCH CASE, THE EXCESS PART OF THE PAYMENTS SHALL REMAIN TAXABLE ACCORDING TO THE LAWS OF SUCH CONTRACTING STATE, DU E REGARD BEING HAD TO THE OTHER PROVISIONS OF THIS AGREEMENT . 27. ACCORDING TO ARTICLE 12 (5) (B) MEANING OF THE TERM FEES FOR TECHNICAL SERVICES SPECIFICALLY EXCLUDES INCOME COVERED UNDER ARTICLE 14 AND 15 OF THE DTAA . THEREFORE, IS SUE IN THIS YEAR IS SPECIFICALLY COVERED IN FAVOUR OF THE ASSES SEE BY THE DECISION OF THE COORDINATE BENCH IN CASE OF GRAPHIT E INDIA [2003] 127 TAXMAN 90 (KOLKATA)(MAG)/[2003] 86 ITD 384 (KOLKATA)/[2003] 78 TTJ 418 (KOLKATA) WHEREIN IDENTICAL ISSUE ITA NO.5259/DEL./2016 8 WITH RESPECT TO INDO US DTAA WAS IN QUESTION. THE C OORDINATE BENCH HELD AS UNDER :- 7. THE PRIMARY THRUST OF RIVAL CONTENTIONS BEFORE US HAS BEEN IN SUPPORT OF THE ASSESSEES CONTENTION THAT T HE IMPUGNED PAYMENT FOR CONSULTANCY FEES IS COVERED BY THE SCOPE OF EXPRESSION INDEPENDENT PERSONAL SERVICES WITHIN MEANINGS OF ARTICLE 15 OF THE INDO US DTAA, AND, OF COURSE, IN SUPPORT OF REVENUES CONTENTION, THAT TH E IMPUGNED PAYMENT IS COVERED BY THE SCOPE OF FEES FO R TECHNICAL SERVICES TERMED AS FEES FOR INCLUDED SER VICES WITHIN MEANINGS OF ARTICLE 12(4) OF THE SAME. ON A CAREFUL ANALYSIS OF THE PROVISIONS OF THE ARTICLE 1 2, HOWEVER, EVEN THIS PROPOSITION SEEMS TO BE SOMEWHAT FALLACIOUS INASMUCH AS IN CASE THE IMPUGNED PAYMENT FALLS WITHIN THE SCOPE OF EXPRESSION INDEPENDENT PE RSONAL SERVICES WITHIN MEANINGS OF ARTICLE 15, THE SAME S HALL AUTOMATICALLY BE OUT OF AMBIT OF ARTICLE 12(4) SINC E, IN VIEW OF THE SPECIFIC PROVISIONS OF ARTICLE 12(5), NOTWITHSTANDING THE PROVISIONS OF ARTICLE 12(4), 'F EES FOR INCLUDED SERVICES' DOES NOT, INTER ALIA, INCLUDE AM OUNTS PAID TO ANY INDIVIDUAL FOR INDEPENDENT PERSONAL SER VICES AS DEFINED IN ARTICLE 15. IN OTHER WORDS, WHEN AN A MOUNT PAID TO AN INDIVIDUAL, OR FOR THAT PURPOSE A FIRM O F INDIVIDUALS, RESIDENT IN THE UNITED STATES OF AMERI CA, IS FOUND TO BE COVERED BY THE SCOPE OF EXPRESSION INDEPENDENT PERSONAL SERVICES WITHIN MEANINGS ASSIGNED IN ARTICLE 15 OF THE INDO US DTAA, IT IS IMMATERIAL WHETHER OR NOT THE SAME IS COVERED BY TH E SCOPE OF FEES FOR INCLUDED SERVICES, WHICH IN COMMON PARLANCE IS KNOWN AS FEES FOR TECHNICAL SERVICES, UNDER ARTICLE 12(4) OF THE INDO US DTAA. IN THAT EVENTUAL ITY, IN VIEW OF THE PROVISIONS OF ARTICLE 12(5), IF AT ALL THAT AMOUNT IS EXIGIBLE TO TAX IN INDIA, IT CAN ONLY BE TAXABLE UNDER ARTICLE 15 OF THE INDO US DTAA. TO THAT EXTEN T, PROVISIONS OF ARTICLE 12(4) AND ARTICLE 15 ARE NONCOMPETING AND MUTUALLY EXCLUSIVE. 28. THERE ARE ALSO SIMILAR CONDITION IN INDO SWISS DTAA IN ARTICLE 12 (5) (B) EXCLUDING PROFESSIONAL SERVICES UNDER ARTICLE 14 AND 15 OF THAT DTAA. THEREFORE, IT IS APPARENT THAT THE SERVICES ARE COVERED UNDER ARTICLE 14 OF THE DTAA AND NOT UN DER ARTICLE 12 OF DTAA. FURTHER IT IS NOT THE CASE OF THE REVEN UE THAT THE SERVICES PROVIDED BY THE SWISS RESIDENT IS NOT PROF ESSIONAL SERVICES AS DEFINED UNDER ARTICLE 14(2) OF DTAA. FU RTHER, IT IS NOT THE CASE OF THE REVENUE THAT SUCH SERVICES ARE PROVIDED BY HIM FROM ITS FIXED BASE IN INDIA OR HE HAS STAYED FOR M ORE THAN 183 DAYS IN INDIA. THEREFORE, WE HOLD THAT NO TAX IS R EQUIRED TO BE DEDUCTED ON PAYMENT MADE TO DR. WERNER STIBAL WHO I S A RESIDENT OF SWISS CONFEDERATION AND RENDERED THE PR OFESSIONAL ITA NO.5259/DEL./2016 9 SERVICES WITH RESPECT TO THE SIMILAR SERVICES AS PR OVIDED BY DR. U THIELE, THEREFORE, THOSE SERVICES ARE INDEPENDENT, PERSONAL SERVICES IN THE NATURE OF INDEPENDENT SCIENTIFIC SE RVICES WHICH SHALL BE TAXABLE ONLY IN SWISS CONFEDERATION. HENCE , NO TAX IS REQUIRED TO BE DEDUCTED ON SUM PAID BY THE ASSESSEE TO DR. WERNER STIBAL U/S 195 OF THE ACT. IN VIEW OF THIS G ROUND NO. 1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 9. THE DECISIONS CITED AS GVK INDUSTRIES LTD. VS. ITO, DIRECTOR OF INCOME-TAX VS. RIO TINTO TECHNICAL SERV ICES AND CENTRICA INDIA OFFSHORE (P.) LTD. (SUPRA) RELIED UPON BY THE LD. DR FOR THE REVENUE ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AS THE SERVICES RENDERED IN THIS CASE WAS INDEPENDENT SCIENTIFIC ACTIVITY SPECIFICALLY COVERE D UNDER ARTICLES 14 & 15 OF THE DTAA. 10. SO, FOLLOWING THE DECISION RENDERED BY THE COOR DINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA), DIS CUSSED IN PRECEDING PARAS, WE ARE OF THE CONSIDERED VIEW THAT SERVICES RENDERED BY DR. WERNER STIBAL AND HANS PETER MEYER ARE COVERED UNDER ARTICLE 14 OF THE DTAA WHICH ARE INDEPENDENT SCIENTIFIC ACTIVITIES. MOREOVER, FINDING ON FACTS HAVE BEEN R ETURNED BY THE COORDINATE BENCH OF THE TRIBUNAL THAT THE ASSESSEE HAS NO FIXED PE IN INDIA AND IT IS UNDISPUTED CASE OF THE ASSESSEE THAT BOTH DR. WERNER STIBAL AND HANS PETER MEYER HAVE NOT STAYED IN INDIA FOR 183 DAYS OR MORE AND AS SUCH, NO TAX IS REQUIRED TO BE DEDUCTED AT SOURCE, HENCE DISALLOWANCE OF RS.11,77,391 AND RS.1 0,16,330/- TO ITA NO.5259/DEL./2016 10 DR. WERNER STIBAL AND HANS PETER MEYER RESPECTIVELY MADE BY THE AO/CONFIRMED BY THE LD. CIT (A) IS ORDERED TO BE DE LETED. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS H EREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF JUNE, 2019. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH ) VICE PRESIDENT JUDICIAL MEMBER DATED THE 14 TH DAY OF JUNE, 2019/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-7, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.