pymts of due diligence reports done in foreing country?

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sushil (Querist)
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31 October 2010 Dear all,

ours is a pvt ltd company. we have formed a 100% subsidiary company in dubai.

we are in the process to acquire a company in italy. ours subsidiary company will hold shares in newly acquired company in itlay.

for the purpose of acquisition we have done due-diligence in Italy. for that we 've to pay Euro 30000.

we will pay this amt from our a/c.(holding co s a/c)
my question are..
1) will it be right to pay due-diligence exp from our a/c?
2) if yes, what rate tds to be deducted? ( payee doesn't 've any permanent est. in India, services recd in italy.)
3) if its not correct to pay this exp from our a/c then what will be other way to treat this transaction?

Waiting for experts reply..
Thanks in advance

Regards,
Sushil.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 October 2010 1) Not fully correct .But OK
2) Section 195 attracts if it the payment comes under "fees for technical services" (explantion 2 to section 9(vii)of IT Act,1961) vide the amendments in Finance Act,2010.
3) Subsidiary is acquirng Italian company. Better Dubai company meet the cost and pay it from there to circumvent 195.

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