Is TDS applicable -payment to foreign consultant

As you explained,

You are getting earnings from US Co., so here no TDS is deductable under Indian Income Tax...

and about that you are using work of  engineers from USA or UK, for the work in India, you are liable to deduct TDS u/s 195 irrespective of who is paying them and in what mode....

As far as the US/UK  person is concerned their income does not arise or accrue in India as they dont have offices in India and also payment is made out of foreign funds. When income is not accruing/arising tn India then sec 195 os not applicable.Also per DTAA their income is not taxable in India. Pl check. If they had visited India and provided the service then what you say is correct.

the situation is as below:-

You (In India) are using service of Engineerings US/UK based, but the payments is made out of Foreign Funds by foreign company and not by you...??

Right...??

Here, sourse rule will apply and accordingly you have to deduct TDS even though they are not getting income from India.

There is a case law on the same where some employees are serving their services in India but the payment was maing out of India to their family where the Court held that since services are used in India, the assessee (company availing their services) has to deduct TDS...

If you stiil not satisfied., consul with Chartered Accountants nearby you....

Yes, TDS would be applicable if services are being rendered in india.