ITO, WD-(IT), KOLKATA, Kolkata V. M/s Emami Paper Mills Ltd., Kolkata

ITA 642/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9622 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 08-04-2016
• Court: TRIBUNAL
• Assessee Lawyers: PASS KOLKATA PANGIR NO AABCG Q
• Keywords: Business income; Double taxation relief; Opportunity of being heard; Permanent establishment
• Section: 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.642/KOL/2016 ( / ASSESSMENT YEAR:2012-2013) INCOME TAX OFFICER (INTERNATIONAL TAXATION), WARD, KOLKATA, 2 ND FLOOR, ROOM NO. 215 AAYAKAR BHAVAN POORVA, 110 SHANTIPALLI,KOLKATA-700107 VS. M/S EMAMI PAPER MILLS LTD., 687, ANANDAPUR, E.M.BYPASS, KOLKATA-700107 ./ ./PAN/GIR NO.: AABCG 1428 Q ( /APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI N.B.SOM, JCIT SR. DR ASSESSEE BY : SHRI RAMESH KUMAR PATODIA, FCA / DATE OF HEARING : 20/12/2016 /DATE OF PRONOUNCEMENT 04/01/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINI NG TO ASSESSMENT YEAR 2012-2013, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-22, KOLKATA, I N APPEAL NO.111/CIT(A)-22/KOL/14-13, DATED 20.01.2016, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UN DER SECTION 201(1)/1A OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATED 28.03.2013. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE COMPANY, M/S.EMAMI PAPER MILLS LIMITED, HEREAFTER C ALLED AS DEDUCTOR HAS REMITTED SOME AMOUNT TO A NON-RESIDENT COMPANY OF POLAND WITHOUT DEDUCTING TAXES. SHOW CAUSE NOTICE U/S 201 OF THE I NCOME TAX ACT, 1961 WAS ISSUED TO THE DEDUCTOR. IN RESPONSE, THE DEDUCT OR COMPANY SUBMITTED ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 2 WRITTEN EXPLANATIONS AND COPIES OF DIFFERENT DOCUME NTS IN SUPPORT OF ITS CLAIM. THE DEDUCTOR COMPANY HAD ENTERED INTO AN AGR EEMENT / CONTRACT DATED 04 TH MARCH 2011 WITH A COMPANY NAMELY POL-INOWEX SA OF POLAND FOR DISMANTLING AND SEA-WORTHY PACKING OF PA PER MILL MACHINERY, AND STUFFING OF ALL ITEMS INTO CONTAINERS AND LOADI NG THE CONTAINERS ON TRUCKS WHICH WAS ACQUIRED BY THE DEDUCTOR COMPANY F ROM HOLMENSBRUK AB, A COMPANY FROM SWEDEN I.E. THE SAID SITE WAS IN SWEDEN. THE PAYMENT WAS MADE TO POL-INOWEX SA OF POLAND, WITHOU T DEDUCTING ANY WITHHOLDING TAXES. THE DETAILS OF PAYMENTS ARE AS U NDER: SL. NO. NAME OF THE RECIPIENT REMITTANCE AMOUNT (RS.) TDS AMOUNT (RS.) DATE OF REMITTANCE NATURE OF PAYMENT AS MENTIONED IN FORM NO.15CA 1. POL-INOWEX SA 76,13,180/- 0 02/11/2011 CHARGES F OR DISMANTLING OF SECOND HAND MACHINE 2. POL-INOWEX SA 41,06,640/- 0 18/01/2012 CHARGES F OR DISMANTLING OF SECOND HAND MACHINE THE ASSESSING OFFICER HELD THAT THE PAYMENTS MADE T O THE NON-RESIDENTS FOR DISMANTLING AND SEA WORTHY PACKING OF PAPER MIL L MACHINERY ARE PAYMENTS MADE FOR FEES FOR TECHNICAL SERVICES AND IS TAXABLE UNDER THE INCOME TAX ACT 1961, IN VIEW OF THE SPECIFIC PROVIS IONS OF SECTION 5(2) (B) READ WITH SECTION 9(1) (VII) (C ) OF THE INCOME TAX ACT 1961, AS WELL AS THE PROVISIONS LAID DOWN UNDER ARTICLE 13-4 OF THE DTAA BETWEEN INDIA AND POLAND. THIS WAY, THE ASSESSING OFFICER COMPUTED TH E TAX LIABILITY ON RS.1,17,19,820/- @ OF 22.5% PLUS INTEREST U/S 201(1 A) AT RS. 29,53,395/-. ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 3 3. AGGRIEVED FROM THE ORDER OF LD. ASSESSING OFFICE R (INTERNATIONAL TAXATION), THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, BY OBSERVING THE FOLLOWINGS :- 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD S AND THE SUBMISSIONS FURNISHED BY THE APPELLANT. THE FACTS A ND CIRCUMSTANCES OF THE CASE SHOWS THAT THE APPELLANT HAS PROCURED AN USED MACHINERY FROM A SWEDISH COMPANY WHICH IS T O BE DISMANTLED, PACKED AND LOADED IN THE TRUCKS FOR TRA NSPORTATION OUTSIDE INDIA. THE APPELLANT HAS HIRED A POLISH COM PANY POL- INOWEX S.A. TO UNDERTAKE A) DISMANTLING AND SEA-WOR THY PACKING OF THE SAID PAPER MILL MACHINERY; (B) STUFFING OF A LL ITEMS INTO CONTAINERS AND (C) LOADING THE CONTAINERS ON TRUCKS . FOR THE SERVICES RENDERED BY THE POLISH COMPANY, THE APPELLANT HAS P AID A TOTAL AMOUNT OF RS. 1,17,19,820/- POL WITHOUT DEDUCTION O F TDS. THE AO HELD THAT THE WORK OF DISMANTLING AND SEA WORTHY PACKING OF PAPER MILL MACHINERY IS A TECHNICAL JOB AS IT REQUI RED HIGHLY TECHNICAL SKILLED TECHNICIANS. THE AO ANALYSED THE CONTRACT B ETWEEN THE APPELLANT AND THE POL-INOWEX S.A. AND CAME TO THE C ONCLUSION THAT THE PAYMENT BY THE APPELLANT ARE FOR 'FEES FOR TECHNICAL SERVICES' AS DEFINED IN SECTION 9(1)(VII)(C) OF THE INCOME TAX ACT AS WELL AS PROVISIONS OF ARTICLE 13-4 OF THE DTAA BETW EEN INDIA AND POLAND. THE AO, THEREFORE DETERMINED THE TAX LIABIL ITY U/S 201(LA) OF THE ACT. 4.1 THE ISSUE THAT HAS TO DECIDED IS THAT WHETHER T HE CONTRACT BETWEEN THE APPELLANT AND THE POLISH COMPANY POL IS A 'WORKS CONTRACT' OR IT IS A 'CONTRACT FOR TECHNICAL WORK'. THE HON'BLE SUPREME COURT IN THE CASE OF BUILDERS ASSOCIATION O F INDIA V. UNION OF INDIA [1989] 73 STC 370 S.C. OBSERVED THAT 'A WO RKS CONTRACT CONSTITUTE A CLASS OF CONTRACTS IN WHICH THE CONTRA CTOR EITHER HIMSELF OR THROUGH HIS EMPLOYEE USES CERTAIN EXPERTISE IN P ERFORMING THE WORK FOR ACHIEVING THE TASK CONTRACTED FOR. THAT IT IS IN THE PROCESS OF ACHIEVING SUCH A TASK THAT THE CONTRACTOR UTILIS ES HIS EXPERTISE.' FROM THE FACTS EMERGING OUT OF THE RECORDS AS ABOVE , THE JOB OF THE POLISH COMPANY AS PER THE CONTRACT WAS TO DISMANTLE , MATCH MARKING, PACKING AND LOADING WORK OF THE USED MACHI NERY IN 4 MONTHS. FOR THIS PURPOSES, POL HAD TO ARRANGE COMPE TENT AND ADEQUATE NUMBER OF PERSONNEL (WORKERS, SUPERVISORS, ENGINEERS ETC.) INCLUDING SUCH SKILLED MANPOWER. POL WAS MADE RESPONSIBLE FOR ANY DAMAGE CAUSED IN THE COURSE OF THE PREPARAT ION, DISMANTLING, PACKING, REMOVAL AND TRANSPORT OF THE EQUIPMENT AND MACHINERY. CONSIDERING THE WORK DONE BY THE POL AND A PERUSAL OF THE TERMS OF THE CONTRACT, I AM INCLINED TO AGREE W ITH THE APPELLANT THAT THOUGH TECHNICAL PERSON WERE INVOLVED, THE WOR K DONE BY POI IS IN NATURE OF A WORKS CONTRACT AND THE PROJECT IS A PROJECT FOR ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 4 'DISMANTLING' SIMPLICITER. AS HELD BY THE HON'BLE H YDERABAD ITAT IN THE CASE OF M/S BHEL-GE-GAS TURBINE SERVICE (P) LIM ITED (SUPRA), THE WORK INVOLVED IN THE INSTANT CASE WAS OF THAT OF DISASSEMBLY OF THE PLANT MACHINERY, AND DID NOT INVOLVE SERVICES O F TECHNICAL NATURE. 4.2 I AM ALSO INCLINED TO AGREE WITH THE APPELLANT THAT THE AO SHOULD HAVE CONSIDERED THE CONTRACT IN TOTALITY AND IT IS NOT PROPER TO READ A SINGLE SENTENCE IN A CONTRACT IN ISOLATION TO REACH A DIFFERENT INFERENCE. THE HON'BLE APEX COURT IN THE CASE OF VO DAFONE INTERNATIONAL HOLDINGS B.V. VS UOI AND ANR. 341 ITR 1, HAD HELD THAT AN AGREEMENT HAS TO BE 'LOOKED AT' AND NOT 'LO OKED THROUGH'. IN THE INSTANT CASE THE AO'S ATTEMPT TO READ THE SU BMISSION OF THE APPELLANT THAT 'THERE IS MINIMAL USE OF HIGHLY SKIL L TECHNICIANS' TO ARRIVE AT THE CONCLUSION THAT THE NATURE OF SERVICE S RENDERED BY POL FALLS UNDER THE CATEGORY OF 'TECHNICAL SERVICES' IS ERRONEOUS IN FACTS AND IN LAW. THE DECISION RENDERED BY AUTHORITY OF A DVANCED RULING IN CASE ALSTOM TRANSPORT SA, IN RE, 349 ITR 292 THA T 'THE BASIC PRINCIPLE IN INTERPRETATION OF A CONTRACT IS TO REA D IT AS A WHOLE AND TO CONSTRUE ALL ITS TERMS IN THE CONTEXT OF THE OBJECT SOUGHT TO BE ACHIEVED AND THE PURPOSE SOUGHT TO BE ATTAINED BY T HE IMPLEMENTATION OF THE CONTRACT. READING PARTS OF TH E CONTRACT AS IMPOSING DISTINCT OBLIGATIONS MAY NOT BE THE PROPER WAY TO UNDERSTAND A COMPOSITE CONTRACT ESPECIALLY FOR INST ALLATION AND COMMISSIONING AND DELIVERY OF A PROJECT OR A SYSTEM ', APPLIES TO THE FACTS OF THE CASE. THE AO HAS TO CONSIDER THE CONTR ACT IN ENTIRETY WHICH IS NOTHING BUT AN AGREEMENT FOR DISMANTLING A ND IS A COMPOSITE WORKS CONTRACT. I AM ALSO INCLINED TO AGR EE WITH THE APPELLANT THAT 'DISMANTLING' WOULD BE CONSIDERED AS 'LIKE PROJECTS' AS PROVIDED IN EXPLANATION (2) OF SECTION 9(1)(VII) OF THE INCOME TAX ACT AND THE PAYMENT MADE BY THE APPELLANT IS EXCLUD ED FROM 'FEES FOR TECHNICAL SERVICES'. 4.3 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T THE PAYMENT MADE BY THE APPELLANT TO POL IS FOR A WORKS CONTRAC T FOR DISMANTLING OF PLANT AND IS EXCLUDED FOR 'FEES FOR TECHNICAL SE RVICES' U/S 9(1)(VII)(C) AND IS ALSO NOT COVERED UNDER ARTICLE 13-4 OF THE DTAA BETWEEN INDIA AND POLAND. THE REMITTANCES MADE TO P OL ARE BUSINESS INCOME OF POL AND THE SAME IS ARISING OUTS IDE INDIA. AS POL HAS NO PERMANENT ESTABLISHMENT IN INDIA, THE SA ME CANNOT BE TAXED IN INDIA AND THEREFORE IT IS HELD THAT THERE IS NO REQUIREMENT TO DEDUCT TAX U/S 195 OF THE INCOME TAX ACT FROM THE R EMITTANCES MADE TO POL. ACCORDINGLY THE ORDER PASSED U/S 201(1)/ (1 A) IS HELD AS INVALID AND THE GROUND 1 TO 3 OF THE APPEAL IS ALLO WED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE REVENUE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 5 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN HOLDING THAT 'DISMANTLING' WOULD BE CONSIDERED AS 'LIKE PROJECTS' AS PROVIDED IN EXPLANATION (2) T O SECTION 9(1)(VII) OF THE I.T.ACT'61 AND IS THEREFORE, EXCLUDED FROM 'FEE S FOR TECHNICAL SERVICES'. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE PAYMENTS TO M/S . POL-INOWEX S.A. OF POLAND IS NOT TAXABLE IN INDIA AS ' FEES FO R TECHNICAL SERVICES' DESPITE THE FACT THAT THE JOB PERFORMED B Y POL IS HIGHLY TECHNICAL AND SKILL ORIENTED AND INCLUDED 'PROVISIO N OF SERVICES OF TECHNICAL AND OTHER PERSONNEL' . 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD,CIT(A) ERRED IN HOLDING THAT THE CONTRACT BETWEE N THE POLISH COMPANY AND THE ASSESSEE IS A 'WORKS CONTRACT' AND NOT CONTRACT FOR TECHNICAL SERVICE DESPITE THE FACT THAT THE NAT URE OF WORK AS PER THE 'MACHINERY DISMANTLING AND PACKAGING' AGREEMENT WAS WITHIN THE SCOPE OF 'FEES FOR TECHNICAL SERVICES' AS PER I NCOME TAX ACT' 61 AND ALSO AS PER INDIA-POLAND DTAA . 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED BY RELYING ON THE DECISION OF HON'B LE HYDERABAD TRIBUNAL IN THE CASE OF M/S. BHEL GE -GAS TURBINE S ERVICE (P) LTD. TO COME TO THE CONCLUSION THAT THE WORK WAS NOT TEC HNICAL IN NATURE, AS THE FACTS ARE DIFFERENT. IN THE CASE OF BHEL GE -GAS TURBINE SERVICE (P) LTD. THE WORK INVOLVED WAS HELD AS ROUT INE REPAIR NOT CONSTITUTING FTS ,HOWEVER, IN THIS CASE THE WORK IS NOT IN THE NATURE OF ROUTINE REPAIR. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D.CIT(A) ERRED BY RELYING ON THE DECISION IN THE CASE OF VODAFONE INT ERNATIONAL HOLDING B.V.VS. UOI AND THE RULING OF AAR IN THE CA SE OF ALSTROM TRANSPORT SA, TO COME TO THE CONCLUSION THAT A CONT RACT HAS BE READ AS A WHOLE, DESPITE THE FACT THAT THE ASSESSING OFF ICER HAS HELD THAT 'DISMANTLING AND SEA-WORTHY PACKING OF PAPER MILL M ACHINERY' IS NOT A PROJECT BUT PART OF A PROJECT AND HE HAS READ THE IMPUGNED CONTRACT AS A WHOLE AND THUS DISSECTING APPROACH HA S NOT BEEN ADOPTED BY THE AO. 6. THE DEPARTMENT CRAVES LEAVE TO ADD OR ALTER, AME ND AND MODIFY, SUBSTANTIATE, DELETE AND/OR REVISE ALL OR ANY OF TH E GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING. , 5. ALTHOUGH IN THIS APPEAL, THE REVENUE HAS RAISED SIX GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING, THE SOLITARY GR IEVANCE OF THE REVENUE HAS BEEN CONFINED TO THE MAIN ISSUE THAT T HE ASSESSEE COMPANY HAD HIRED ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 6 A FOREIGN COMPANY POL- INOWEX S.A. (NON-RESIDENT CO .) TO UNDERTAKE A) DISMANTLING AND SEA-WORTHY PACKING OF THE PAPER MI LL MACHINERY; (B) STUFFING OF ALL ITEMS INTO CONTAINERS AND (C) LOADING THE CONTA INERS ON TRUCKS. FOR THE SERVICES RENDERED BY THE POL- INOWEX S.A. (NON-RESI DENT CO.), THE ASSESSEE COMPANY HAD PAID A TOTAL AMOUNT OF RS.1,17,19,820/- WITHOUT DEDUCTION OF TDS. SINCE, IN PARA NO.5 CITED ABOVE, WE HAVE SUMMARIZED ALL SIX GROUNDS RAISED BY THE REVENUE THEREFORE, WE DO NOT ADJUDICATE EACH AND EVERY GROUND SEPARATELY. 5.1 LD. DR FOR THE REVENUE HAS SUBMITTED THAT THE A SSESSEE COMPANY HIRED THE FOREIGN PERSONS FOR DISMANTLING THE MACH INERY AND PAID THE FEES TO THEM FOR THEIR TECHNICAL SERVICES. THE FEE HAS B EEN PAID BY THE ASSESSEE WITHOUT DEDUCTING THE TDS. DISMANTLING RE QUIRES TECHNICAL KNOWLEDGE AND IT WAS A CONTRACT FOR SERVICE THEREFO RE IT DOES FALL IN THE DEFINITION OF FEES FOR TECHNICAL SERVICES HENCE T DS IS REQUIRED TO BE DEDUCTED. THE ASSESSEE HAD USED TECHNICAL SERVICE S, AS THE WORK EXECUTED BY THE NRI WAS DISMANTLING OF MCHINERIES WHICH REQUIRES SKILL AND TECHNICAL KNOWLEDGE A LAYMAN CAN NOT DISMANTLE A SOPHISTICATED MACHINERY. THEREFORE, TDS WAS REQUIRED TO BE DEDUC TED. THE LD. CIT(A) HAD WRONGLY CONSIDERED DISMANTLING AS LIKE PROJECT S AS PROVIDED IN EXPLANATION (2) TO SECTION 9(1)(VII) OF THE I.T.ACT . THE LD. DR POINTED OUT THAT PAYMENT TO M/S POL-INOWEX SA OF POLAND IS TAXA BLE IN INDIA, ON PAYMENT BASIS AS THEY RENDERED SERVICES IN INDIA, T HEREFORE, TDS WAS REQUIRED TO BE DEDUCTED ON PAYMENT OF FEES FOR TECH NICAL SERVICES. NO ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 7 TDS HAD BEEN DEDUCTED, DESPITE THE FACT THAT THE JO B PERFORMED BY M/S POL-INOWEX SA OF POLAND IS HIGHLY TECHNICAL AND SKI LL ORIENTED AND INCLUDED PROVISION OF SERVICE OF TECHNICAL AND OTH ER PERSONNEL. THE LD. DR ALSO POINTED OUT THAT CONTRACT BETWEEN M/S POL-I NOWEX SA AND ASSESSEE IS A CONTRACT FOR TECHNICAL SERVICES BECAU SE THE NATURE OF THE WORK AS PER THE MACHINERY DISMANTLING AND PACKAGIN G AGREEMENT WAS WITHIN THE SCOPE OF FEES FOR TECHNICAL SERVICES AS PER THE I.T.ACT AND ALSO AS PER THE INDIA-POLAND DTAA. THE LD. DR ALSO POINT ED OUT THAT LD. CIT(A) WRONGLY RELIED ON THE DECISION OF HYDERABAD TRIBUNA L IN THE CASE OF M/S BHEL GE-GAS TURBINE SERVICE (P) LTD. CAME TO THE CO NCLUSION THAT THE WORK WAS NOT TECHNICAL IN NATURE, AS THE FACTS ARE DIFFERENT. IN THE CASE OF BHEL GE -GAS TURBINE SERVICE (P) LTD. THE WORK INVO LVED WAS HELD AS ROUTINE REPAIR NOT CONSTITUTING FTS , HOWEVER, IN T HIS CASE THE WORK IS NOT IN THE NATURE OF ROUTINE REPAIR. THE LD. DR ALSO PO INTED OUT THAT IN THE CASE OF VODAFONE INTERNATIONAL HOLDING B.V.VS. UOI AND THE RULING OF AAR IN THE CASE OF ALSTROM TRANSPORT SA, TO COME TO THE CONCLUSION THAT A CONTRACT HAS BE READ AS A WHOLE, DESPITE THE FACT T HAT THE ASSESSING OFFICER HAS HELD THAT 'DISMANTLING AND SEA-WORTHY P ACKING OF PAPER MILL MACHINERY' IS NOT A PROJECT BUT PART OF A PROJECT A ND HE HAS READ THE IMPUGNED CONTRACT AS A WHOLE AND THUS DISSECTING AP PROACH HAS NOT BEEN ADOPTED BY THE AO. THIS WAY, THE LD. DR SUBMITTED T HAT THE APPEAL OF THE REVENUE SHOULD BE ALLOWED. 5.2. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE UNDER CONSIDERATION HAD AN AGREEMENT WITH M/S POL-INOWEX ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 8 SA OF POLAND (POL) FOR DISMANTLING OF THE PLANT AND MACHINERY. AS PER THIS AGREEMENT, THE WORK EXECUTED BY M/S POL-INOWEX DO NOT REQUIRE AND TECHNICAL AND SKILL. THE LD DR ALSO HIGHLIGHTE D THE IMPORTANT TERMS AND CONDITIONS OF THE AGREEMENT, WHICH ARE REPRODUC ED BELOW :- WHEREAS EMAMI, A LEADING PLAYER IN THE INDIAN PAPE R INDUSTRY, OWNS AND OPERATES A PAPER MILL UNIT #1 AT BALASORE, ORISSA AND UNIT#2 AT KOLKATA, WEST BENGAL. AND WHEREAS EMAMI, HAS PROCURED A USED PAPER MACHIN E (PM#2) FROM HOLMENS BRUK AB, HALLSTAVIK, SWEDEN, AN D EMAMI REQUIRES THE WORK FOR DISMANTLING, MATCH MARKING, P ACKING AND CONTAINERIZATION OF ASSETS OF THE SECOND HAND PAPER MACHINE. SCOPE OF WORK-DISMANTLING OF PAPER MILL MACHINERY, FROM HOLMENS BRUK AB, SWEDEN,SEAWORTHY PACKING AND STUFFING ALL ITEMS OF THE EQUIPMENT INTO CONTAINERS AND LOADING THE CONTAINER S ON TRUCKS. THIS AGREEMENT IS PART AND PARCEL OF PURCHASE OF PL ANT AND MACHINERY AND IT IS PROVED FROM THE VARIOUS CLAUSES OF THE SAID A GREEMENT THAT THE PAYMENT WAS NOT FOR TECHNICAL SERVICES.THE SCOPE OF WORK MENTIONED IN THE AGREEMENT CLEARLY SAYS THAT IT IS FOR DISMANTLING OF PAPER MILL MACHINERY WHICH DOES NOT REQUIRE ANY TECHNICAL KNOWLEDGE AND SPECIF IC SKILL. APART FROM THIS, LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TO SECTION 9(1)(VII), EXPLANATION 2 OF THE ACT, WHICH READS AS UNDER :- EXPLANATION [2].FOR THE PURPOSES OF THIS CLAUSE, ' FEES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LU MP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SE RVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD 'SALARIES'. THE ABOVE EXPLANATION CLEARLY SAYS THAT 'FEES FOR T ECHNICAL SERVICES' DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASS EMBLY, MINING OR LIKE ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 9 PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATIO N WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD ' SALARIES'. THE LD. AR FOR THE ASSESSEE ALSO POINTED OUT THAT THE TERM LI KE PROJECT INCLUDES DISMANTLING I.E. LIKE PROJECTS MEAN DISMANTLING A LSO. HE HAS ALSO POINTED OUT THAT THE ASSEMBLY MEANS DISMANTLING ALSO. LD. A R ALSO POINTED OUT THAT THERE IS A DIFFERENCE BETWEEN CONTRACT OF WOR K AND CONTRACT OF SERVICE. IN THE CASE OF ASSESSEE UNDER CONSIDERATI ON THE AGREEMENT IS FOR CONTRACT OF WORK WHICH DOES NOT REQUIRE ANY TECHN ICAL KNOWLEDGE AND SPECIFIC SKILL. IF THE ASSESSEE HIRES A PERSON OUTS IDE INDIA DOES NOT MEAN THAT HE IS PAYING FEE FOR TECHNICAL SERVICES. THE A SSESSEE HAS HIRED THE PERSONS FROM OUTSIDE INDIA JUST TO DISMANTLE THE MA CHINERY, WHICH DOES NOT REQUIRE ANY TECHNICAL EXPERTISE AND SPECIAL SKI LL. IN ORDER TO SUPPORT HIS PLEA, THE LD. AR, HAS ALSO RELIED ON THE FOLLOWING JUDGMENTS :- I) CENTRAL BOARD OF DIRECT TAXES, 76 TAXMAN 432 (DE LHI) : 4.16 MR. SYALI IS RIGHT IN POINTING OUT THE QUALITATIVE DIFFERENCES BETWEEN THE SUBJECT, REFERRED AS 'WORK' AND THE SUB JECT REFERRED AS 'SERVICE'. THE TWO WORDS CONVEY DIFFERENT IDEAS. IN THE FORMER (I.E., 'WORK') THE ACTIVITY IS PREDOMINANTLY PHYSIC AL; IT IS TANGIBLE. IN THE ACTIVITY REFERRED AS 'SERVICES', THE DOMINANT F EATURE OF THE ACTIVITY IS INTELLECTUAL, OR AT LEAST, MENTAL. CERTAINLY, 'W ORK' ALSO INVOLVES INTELLECTUAL EXERCISE TO SOME EXTENT. EVEN A GARDEN ER HAS TO BESTOW SUFFICIENT CARE IN DOING HIS JOB; SO IS THE CASE WI TH A MASON, CARPENTER OR A BUILDER. BUT THE PHYSICAL (TANGIBLE) ASPECT IS MORE DOMINANT THAN THE INTELLECTUAL ASPECT. IN CONTRAST, IN THE CASE OF RENDERING ANY KIND OF 'SERVICE', INTELLECTUAL ASPEC T PLAYS THE DOMINANT ROLE. THE VOCATION OF A LAWYER, DOCTOR, AR CHITECT OR A CHARTERED ACCOUNTANT (THERE ARE OTHER SIMILAR VOCAT IONS ALSO) INVOLVES DEEP INTELLECTUAL EXERCISE AND PHYSICAL SK ILL INVOLVED IN THEIR VOCATIONAL ACTIVITIES IS MINIMAL. A DANCER'S PERFORMANCE NO DOUBT INVOLVES PHYSICAL MOVEMENT; BUT ALL THE MOVEM ENTS ARE PROJECTIONS OF THE TALENT WHICH IS NATURAL, OR ACQU IRED BY TRAINING. A SURGERY CERTAINLY INVOLVES PHYSICALLY VISIBLE AND T ANGIBLE WORK; BUT, INHERENTLY, IT IS THE MENTAL SKILL DEVELOPED BY THE INTELLECTUAL EXERCISE THAT PERMEATES THE OPERATION. ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 10 I) ANDREW YULE & CO. LTD. 207 ITR 899 (CAL) : SUHAS CHANDRA SEN, J. THE PETITIONER HAS CHALLENGED AN ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX UNDER SECT ION 264 OF THE INCOME-TAX ACT, 1961. IN THE ORDER PASSED, THE COMMISSIONER OF INCOME-TAX HAS HELD IN SUBSTANCE THAT THE CONTRACT FOR SUPPLY OF A BELT VULCANIZING PRESS TO THE PETITIONER RESULTED I N ACCRUAL OF INCOME IN INDIA TO THE FOREIGN SUPPLIER ON WHICH PROPER TA X HAD NOT BEEN PAID. THE FACTS OF THE CASE AS RECORDED BY THE COMM ISSIONER IN HIS ORDER ARE AS UNDER: 'MESSRS. G. SIEMPELKAMP GABH AND CO. (MESSRS. G. S. G.) HAD SOLD A BELT VULCANIZING PRESS TO THE APPLICANT AND HAD ALSO ENTERED INTO A SEPARATE CONTRACT FOR ITS ERECTION I N INDIA. MESSRS. G. S. G. HAD BEEN PAID DM 80,000 AS PER CONTRACT FO R THIS JOB AND THE BILL SUBMITTED BY IT FOR DM 73,714 HAS BEEN TAKEN ON RECORD. AS PER AGREEMENT, THE TAXES, IF ANY, WERE T O BE BORNE BY THE APPLICANT. HOWEVER, AT THE TIME OF REMITTANCE O F THE ABOVE AMOUNT, TAX WAS DEMANDED UNDER SECTION 195. THE PRE SENT PETITION IS IN RESPECT OF THIS DEMAND'. ON BEHALF OF THE PETITIONER, DR. PAL HAS CONTENDED THAT THERE IS NO QUESTION OF INVOKING SECTION 9 IN THIS CASE AS THE ISSUE IS CONCLUDED BY THE AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION B ETWEEN INDIA AND THE FEDERAL GERMAN REPUBLIC WHICH WAS NOTIFIED ON SEPTEMBER 13, 1960 (SEE [1960] 40 ITR (ST.) 21). MOREOVER, IT HAS BEEN CONTENDED THAT THE APPROACH OF THE COMMISSIONER IS ERRONEOUS. THE ENTIRE RESPONSIBILITY FOR THE CONSTRUCTION OF A MACHINE WAS UPON THE GERMAN FIRM. THE GERMAN TECHNICIANS HAD RENDERE D SOME SERVICE IN INDIA FOR THE PURPOSE OF SETTING UP THE PLANT AND MAKING THE PLANT WORKABLE. THAT SERVICE WAS IN CONNECTION WITH AND PURSUANT TO THE CONTRACT TO SELL A BELT VULCANIZING PRESS. THEREFORE, SUCH SERVICE CANNOT BE TREATED AS 'LABOUR OR PERSON AL SERVICES' AS MENTIONED IN ARTICLE 3 OF THE AGREEMENT FOR AVOIDAN CE OF DOUBLE TAXATION. IN MY JUDGMENT, THE WRIT PETITION MUST SUCCEED. THE SUPPLIER HAS A PERMANENT ESTABLISHMENT IN GERMANY WHERE THE PRESS WAS MANUFACTURED. CERTAIN SERVICES WERE RENDERED IN CON NECTION WITH THE SETTING UP OF THAT PRESS IN INDIA. THIS CANNOT BE TREATED AS PERSONAL SERVICE IN ANY WAY EVEN IF THE AGREEMENT F OR RENDERING SERVICE WAS EMBODIED IN A SEPARATE AGREEMENT. THE WRIT PETITION, THEREFORE, SUCCEEDS. RULE IS MAD E ABSOLUTE. THERE WILL BE AN ORDER AS PRAYED FOR IN TERMS OF PRAYERS (A) AND (B) OF THE PETITION. THE REFUND MUST BE GIVEN WITHIN A PERIOD OF 3 (THREE) MONTHS FROM THE DATE OF COMMUNICATION OF THIS ORDER . II) GUJARAT PIPAVAV PORT LTD., 67 TAXMANN.COM 370 (MUMBAI TRIB) : 5.4 NOW, WE WOULD LIKE TO TAKE UP THE ISSUE OF SPC DATE D 29.10.2005(PG.464-471 OF THE PB).IF THE SERVICES RE NDERED BY THE ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 11 SUPPLIER ARE EXAMINED IT BECOMES CLEAR THAT SUCH SE RVICES ARE INEXTRICABLY CONNECTED TO THE SALES OF CRANES. WE W ANT TO CLARIFY THAT IT IS TRUE FOR OTHER SPC.S. ALSO. SETTLED LAW,GOVER NING SUCH CONTRACTS, STIPULATE THAT IF SERVICES ARE INTRINSIC ALLY CONNECTED TO THE SALE OF GOODS SAME CANNOT BE TREATED AS FIS OR FTS AND THEY WOULD CONSTITUTE PART OF BUSINESS INCOME. THE HON'B LE APEX COURT IN THE CASE OF ISHIKAWAJMA-HARIMA HEAVY INDUSTRIES LTD. V. DIT [2007] 288 ITR 408/158 TAXMAN 259 HAS UPHELD THE ABOVE PRINCIPLE. THE HON'BLE CALCUTTA HIGH COURT IN THE M ATTER OF ANDREW YULE & CO. LTD. V. CIT [1994] 207 ITR 899 (CAL.) HA S ALSO DEALT WITH THE IDENTICAL ISSUE. IN THAT MATTER A GERMAN COMPAN Y HAD SUPPLIED CERTAIN MACHINERY TO THE INDIAN ASSESSEE AND HAD RE NDERED CERTAIN SERVICES IN SETTING UP OF THE MACHINERY. CONSIDERIN G THOSE FACTS, THE HON'BLE COURT HELD THAT SERVICES RENDERED IN SETTIN G UP OF MACHINE COULD NOT BE TREATED AS PERSONAL SERVICE EVEN IF TH E AGREEMENT FOR RENDERING THE SERVICES WAS EMBODIED IN A SEPARATE A GREEMENT, THAT THE GERMAN COMPANY HAD NO PE IN INDIA, THAT IN VIEW OF THE INDO- GERMAN DTAA NO INCOME HAD ACCRUED IN INDIA, THAT TH ERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE. FINALLY, WE WOUL D LIKE TO REFER TO THE ORDER OF THE SPECIAL BENCH OF THE CHENNAI TRIBUANL, DELIVERED IN THE CASE OF ITO V. PRASAD PRODUCTION LTD. [2010] 125 IT D 263. IN THAT MATTER THE ASSESSEE HAD PURCHASED CONSIDERING THE A BOVE, WE HOLD THAT THE FAA WAS NOT JUSTIFIED IN HOLDING THAT SERVICES RENDERED IN PURSUANCE OF THE PURCHASE AGREEMENT CAN BE TAXED AS FIS/FTS. III) BHEL-GE-GAS TURBINE SERVICING (P) LTD., 24 TAX MANN.COM 25(HYD): 16. THE ABOVE ACTIVITIES INVOLVE ASSEMBLY, DISASSEMBLY , INSPECTION, REPORTING AND EVALUATION. CIT(A) EXAMINED EVERY ACT IVITY ENLISTED ABOVE AND CAME TO THE CONCLUSION THAT NONE OF THE A BOVE WORKS INVOLVE SERVICES OF TECHNICAL NATURE. THE DISCUSSIO N GIVEN BY THE CIT(A) IN PARA 5.4.2 IS RELEVANT. WE AGREE WITH THE SAME CONSIDERING THE SETTLED LEGAL POSITION THAT ROUTINE MAINTENANCE REPAIRS ARE NOT FTS AS HELD BY THE DELHI BENCH OF T HE TRIBUNAL IN THE CASE OF LUFTHANSA CARGO INDIA (P.) LTD. (SUPRA) . FOR THE PURPOSE OF COMPLETENESS OF THIS ORDER, WE REPRODUCE BELOW T HE RELEVANT PRARAGRAPH OF THE SAID DECISION IN THE CONTEXT OF T HE QUESTIONS RAISED IN THE SAID DECISION- 'IN CONCLUSION, TECHNIK CARRIED OUT THE REPAIR WORK IN THE NORMAL COURSE OF ITS BUSINESS IN GERMANY, WITHOUT A NY INVOLVEMENT OR PARTICIPATION OF THE ASSESSEE'S PERS ONNEL. THE OVERHAUL REPAIRS INVOLVED WERE ROUTINE MAINTENANCE REPAIRS. IT CANNOT THEREFORE BE SAID THAT TECHNIK RENDERED ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICE TO THE ASSESSEE. IN THIS VIEW OF THE MATTER, WE HOLD THAT THE PAYMEN TS MADE BY THE ASSESSEE TO NON-RESIDENTS WORKSHOPS OUTSIDE IND IA DO NOT CONSTITUTE PAYMENT OF FEES FOR MANAGERIAL, CONSULTA NCY OR TECHNICAL SERVICES AS DEFINED IN EXPLANATION 2 TO S ECTION 9(1)(VII). THE ASSESSEE SUCCEEDS ON THIS GROUND.' ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 12 REGARDING THE DECISION OF THE HYDERABAD IN THE CASE OF MANNESMANN DEMAG LAUCHHAMMER (SUPRA) WHICH INVOL VES DEPUTING OF TECHNICIANS TO INDIA FOR SUPERVISION OF REPAIRS TO BE CARRIED OUT AT THE PLANT AND MACHINERY PURCHASED BY THE NMDC, WE FIND THAT THE SAID DECISION IS DISTINGUISHABLE ON F ACTS. SUCH DEPUTATION, WHETHER DEPUTATION OR SUPERVISION, IS A BSENT IN BOTH INSTANT CASES AS WELL AS THE CASE BEFORE IT, AS OBS ERVED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CITED CASE. THE RELEVA NT PARA OF THE ORDER OF THE TRIBUNAL IN THAT CASE READS AS FOLLOWS - 'WE FIND THAT IN DEMAG'S CASE, THE FOREIGN COMPANY RENDERED 'TECHNICAL CONSULTANCY' BY WAY DEPUTING A TECHNICIA N TO INDIA FOR SUPERVISING REPAIRS TO BE CARRIED OUT ON THE PLANT AND MACHINERY PURCHASED BY NATIONAL MINERAL DEVELOPMENT CORPORATION. IT IS NOT THE REPAIR WORK PER SE WHICH HAS BEEN HELD TO BE TECHNICAL SERVICES BUT IT IS THE PROVISI ON OF THE CONSULTANT TECHNICIAN DEPUTED TO INDIA FOR SUPERVIS ING THE REPAIRS WHICH HAS BEEN TREATED AS CONSULTANCY SERVI CES. THE FOREIGN TECHNICIAN STAYED ON IN INDIA FOR 44 DAYS T O ADVISE AND SUPERVISE REPAIR WORK WHICH WAS OBVIOUSLY CARRIED O UT BY THE ENGINEERS AND WORKERS OF THE INDIAN COMPANY. THUS, THE NATURE OF SERVICES RENDERED BY THE FOREIGN COMPANY WAS CONSULTANCY OF TECHNICAL NATURE THROUGH THE PROVISI ON OF ITS TECHNICIAN DEPUTED TO INDIA. OUR CONCLUSION IS SUPP ORTED BY THE DECISION OF ANDHRA PRADESH HIGH COURT IN THE SAME C ASE REPORTED IN 238 ITR 861, WHEREIN HON'BLE HIGH COURT AFFIRMING THE AFORESAID DECISION OF THE TRIBUNAL HELD THAT TH E EXPLANATION 2 HAS EXPANDED THE SCOPE OF SECTION 9(1)(VII)(B) BY PROVIDING THAT THE SERVICES OF TECHNICAL OR OTHER PERSONNEL W OULD BE TAXABLE. IT HAS BEEN REPEATEDLY STATED BY THE ASSES SEE THAT NO FOREIGN TECHNICIAN WAS EVER DEPUTED OF INDIA. THE L OWER AUTHORITIES AND THE DR HAVE NOT POINTED OUT ANY INS TANCE OF A TECHNICIAN HAVING BEEN ASSIGNED OF INDIA. THIS DECI SION THEREFORE IS OF NO ASSISTANCE TO THE REVENUE.' THUS, THE ABOVE DECISIONS OF THE TRIBUNAL ARE RELEV ANT FOR THE PROPOSITION THAT THE ROUTINE REPAIRS DO NOT CONSTIT UTE 'FTS' AS THEY ARE MERELY REPAIR WORKS AND NOT TECHNICAL SERVICES. TECHNICAL REPAIRS ARE DIFFERENT FROM 'TECHNICAL SERVICES'. TH US, THE PAYMENTS MADE FOR 'TECHNICAL SERVICES' ALONE ATTRACT THE PRO VISIONS OF S.9(1)(VII) AND ITS EXPLANATION 2. FURTHER, IT IS A LSO A SETTLED ISSUE AT THE LEVEL OF THE TRIBUNAL THAT EVERY CONSIDERATION MADE FOR RENDERING OF SERVICES DO NOT CONSTITUTE INCOME WITHIN THE MEA NING OF S.9(1)(VIII) OF THE ACT AND FOR CONSIDERING THE SAM E, FIRST OF ALL THE SAID CONSIDERATION IS FOR THE FTS. THEREFORE, CONSI DERING THE ABOVE, DECISION OF DELHI BENCH OF THE TRIBUNAL, WHICH EXPL AINED THE SCOPE OF THE PROVISIONS, WE ARE OF THE VIEW THAT THE IMPU GNED ORDERS OF THE CIT(A), FOR THE YEARS UNDER CONSIDERATION, ON THIS ASPECT OF THE MATTER, DO NOT CALL FOR INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED IN THESE APPEALS OF THE REVENUE ARE DISMISSED. ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 13 17. WITHOUT PREJUDICE, THE ASSESSEE RAISED THE ISSUE OF NON- APPLICABILITY OF THE PROVISIONS OF S.201 TO THE ASS ESSMENT YEARS 2001-02 AND 2002-03 AND THE SAID ARGUMENT WAS NEVER RAISED OR DISCUSSED BY THE LOWER AUTHORITIES. SINCE THE IMPUG NED ORDER OF THE ASSESSING OFFICER WAS PASSED PRIOR TO THE AMENDMENT TO THE PROVISIONS OF S.201 BY THE FINANCE ACT, 2008 WITH R ETROSPECTIVE EFFECT FROM 1.4.2003, TO BE FAIR, THE REVENUE NORMA LLY DESERVES FRESH OPPORTUNITY TO BE HEARD ON THIS ISSUE. INSTEA D OF SETTING ASIDE THIS ISSUE TO THE FILES OF THE LOWER AUTHORITIES, C ONSIDERING THE ALTERNATIVE NATURE OF THE ARGUMENT, AND ALSO CONSID ERING THE FACT, WE HAVE ALREADY GRANTED RELIEF TO THE ASSESSEE AS P ER DISCUSSION IN THE PRECEDING PARAGRAPHS OF THIS ORDER ON MERITS, W E DISMISS THE ALTERNATE ARGUMENT OF LD COUNSEL HOLDING THE ADJUDI CATION OF THIS ISSUE BECOMES AN ACADEMIC EXERCISE. THEREFORE, THE SAME ARE DISMISSED AS ACADEMIC. 5.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FO R THE ASSESSEE ARE SUPPORTED BY VARIOUS JUDGMENTS OF HONBLE HIGH COUR TS AND TRIBUNALS. THE LD. AR FOR THE ASSESSEE, HAS POINTED OUT THAT T HERE IS A DIFFERENCE BETWEEN CONTRACT OF WORK AND CONTRACT OF SERVICE . THE TWO WORDS CONVEY DIFFERENT IDEAS. IN THE 'CONTRACT OF WORK' T HE ACTIVITY IS PREDOMINANTLY PHYSICAL; IT IS TANGIBLE. IN THE ACTI VITY REFERRED AS 'CONTRACT OF SERVICE', THE DOMINANT FEATURE OF THE ACTIVITY I S INTELLECTUAL, OR AT LEAST, MENTAL. CERTAINLY, 'CONTRACT OF WORK' ALSO INVOLVES INTELLECTUAL EXERCISE TO SOME EXTENT. EVEN A GARDENER HAS TO BESTOW SUFFICIE NT CARE IN DOING HIS JOB; SO IS THE CASE WITH A MASON, CARPENTER OR A BU ILDER. BUT THE PHYSICAL (TANGIBLE) ASPECT IS MORE DOMINANT THAN THE INTELLE CTUAL ASPECT. IN CONTRAST, IN THE CASE OF RENDERING ANY KIND OF 'SER VICE', INTELLECTUAL ASPECT PLAYS THE DOMINANT ROLE. IN THE CASE UNDER CONSID ERATION, THE SCOPE OF WORK MENTIONED IN THE AGREEMENT CLEARLY EXPLAINS TH AT IT IS CONTRACT OF ITA NO.642/KOL/16 M/S EMAMI PAPER MILLS LTD. 14 WORK TO DISMANTLE THE MACHINERY, THEREFORE, IT IS NOT A CONTRACT OF SERVICE HENCE PAYMENT BY THE ASSESSEE IS NOT FOR TECHNICAL SERVICES, THEREFORE, THE ASSESSEE COMPANY IS NOT LIABLE TO DEDUCT TDS. 5.4 CONSIDERING THE FACTUAL POSITION AND PRECEDENTS CITED BY LD. AR FOR THE ASSESSEE, WE ARE OF THE VIEW THAT DISMANTLING O F MACHINERY DOES NOT REQUIRE ANY TECHNICAL SERVICES, THEREFORE, THE PRES ENT CASE DOES NOT FALL IN THE AMBIT OF FEES FOR TECHNICAL SERVICES AND THE A SSESSEE COMPANY DOES NOT REQUIRE TO DEDUCT TDS. THEREFORE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). HENCE, WE DO NOT HESITA TE TO CONFIRM THE ORDER PASSED BY LD. CIT(A). ACCORDINGLY, WE CONFIRM THE O RDER PASSED BY LD. CIT(A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07/01/ 2017 SD/ - (A.T.VARKEY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 04/01/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-ITO(INTERNATIONAL TAXATION, WD KOL 2. / THE RESPONDENT.-M/S EMAMI PAPER MILLS LTD 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//