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The Cochin Bench of the Income-tax Appellate Tribunal (the Tribunal), in the case of Device Driven (India) Pvt. Ltd. (the taxpayer) held that export commission paid to a non-resident director, a commission agent, for securing export orders, ensuring supply of software, etc. constitutes ‘technical services’ under the Income-tax Act, 1961 because such services require the commission agent’s vast technical knowledge and experience.
The Tribunal observed that as a non-resident director, the commission agent has every right to look into and was required to take care of the affairs of the taxpayer and hence, the office of the taxpayer in India can be treated as fixed base for the commission agent. Accordingly, the payments made to him are also taxable as Independent Personal Services of the India-Switzerland tax treaty.