2017-TII-42-HC-DEL-INTL
PR CIT Vs MODI APOLLO INTERNATIONAL GROUP PVT LTD: DELHI HIGH COURT (Dated: July 31, 2017)
Income tax - Sections 9(1)(vi) & 195
Keywords - Evaluation of reports - FTS - capital expenditure - royalty payment - TDS
The Revenue preferred the present appeal challenging the concurrent findings by both the CIT(A) as well as ITAT, whereby it was held that the payment made by Assessee to Apollo International Inc., USA (AII) for evaluation of reports and course content was not 'FTS' and hence could not be subject to TDS u/s 195 of I-T Act. The second concurrent finding of the Appellate Authorities which is impugned in the present case concerns the deletion of the addition made by AO on account of royalty payment to AII by holding it to be capital in nature.
On appeal, the HC held that,
Whether oversea payment made for evaluation of reports and course content, can be treated as 'FTS' warranting TDS u/s 195, if there is no element of profit embedded in reimbursement for the evaluation undertaken and no technical expertise was required to render assistance for identification of candidates for admission - NO: HC
+ the concurrent findings of the CIT(A) and the ITAT are that there was no element of profit embedded in the reimbursement for the evaluation undertaken and, therefore, it was not FTS. The ITAT also noted that no technical expertise/services were required to render assistance for identification of candidates for admission. On the second issue it was found that the payment of royalty was with reference to the gross fee collected and there was no capital element involved in it. Having heard the counsel for the Revenue, the Court is satisfied that the above concurrent findings suffer from no legal infirmity.
Revenue's appeal dismissed