Law:

Section:

Section 90 of the Income-tax Act, 1961, read with article 12 of the Double Taxation Avoidance Agreement between India and USA - Double Taxation Agreement - Where exists - Applicant, an Indian company, proposes to construct an international quality commercial office/hotel complex and for that purpose it has entered into an agreement with an American company, 'HOK' for provision of architectural design services which included development of programme and master plan concept design; development of schematic design concepts; preparation of design development drawings; coordination and drawing review of documents; assisting owner in bidding and contractor selection process; observing construction progress; review of cost saving and alternative proposals; and additional services as may be required - Under agreement, HOK will receive fixed price in US Dollars for all basic services and a further amount at various stages by way of reimbursement of compensation payable to consultants in USA - Whether, on facts, entire consideration received by HOK from applicant except amount receivable as consultancy fees to consultants in USA is liable to be taxed in India as 'fees for included services' as per article 12(4) and would attract tax at rate of ten per cent as prescribed in section 115A - Held, yes - Whether however, payment of amounts to HOK by way of reimbursement of expenses actually incurred by it does not constitute chargeable income and withholding tax under section 195 is not necessary in respect of said payments - Held, yes FACTS The applicant is an Indian company engaged in the business of develop-ment and management of commercial real estate. It proposes to construct an international quality commercial office/hotel complex in Gurgaon. For this purpose, it has entered into an agreement with an American company 'HOK' for provision of architectural design services. The agreement also provides for appointment of a local architect as an associate architect and, accordingly, 'RSP' an Indian company, has been appointed as 'associate architect'. The services to be provided under the agreement are development of programme and master plan concept design; development of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492