Tds

Yes, TDS to be deducted u/s 195

Reimbursement of market research on cost sharing: NON-TAXABLE:

Assessee was a manufacturer of automobile products in India – ‘LDV’ was a resident of UK and was also in business of manufacture of automobiles in U.K. – Assessee and ‘LDV’ had proposals for joint venture in area of automobile manufacture – ‘LDV’ wanted to do market research to find out potential market for different types of vehicles and consumer preferences in India – ‘LDV’ proposed to assessee for conduct of market research and sharing of costs between assessee and ‘LDV’ in respect of proposed market research – As per said agreement ‘LDV’ carried on market research and raised invoice on assessee. Assessee remitted certain amount to ‘LDV’ without deducting tax at source. HELD, since ‘LDV’ merely conducted market research on acceptability of possible market for its products in India, and no technical service was being made available to assessee, payment-in-question was a reimbursement of expenses and was not in nature of fees for technical services as contended by revenue. (Mahindra & Mahindra Ltd. vs. ADIT [2012] 145 TTJ 400 (Mumbai)).