No TDS u/s 195 on Project-Specific Design Services: ITAT Deletes ₹1.84 Cr Disallowance on Singapore Consultancy Payments [Read Order]
The Tribunal held that project-specific architectural and structural design services did not make available technical knowledge, and therefore did not qualify as FTS under the India–Singapore DTAA.
![No TDS u/s 195 on Project-Specific Design Services: ITAT Deletes ₹1.84 Cr Disallowance on Singapore Consultancy Payments [Read Order]](https://images.taxscan.in/h-upload/2026/04/13/2132971-project-specific-design-servicesjpg.webp "No TDS u/s 195 on Project-Specific Design Services: ITAT Deletes ₹1.84 Cr Disallowance on Singapore Consultancy Payments [Read Order]")
The Income Tax Appellate Tribunal [ITAT] has set aside a disallowance of ₹1.84 crore in respect of Forum Homes Private Limited. The Tribunal observed that the payments made to entities based out of Singapore for providing architectural and structural design services are not liable to be taxed as Fees for Technical Services (FTS). READ MORE:TDS Credit Cannot BeDenied Due...
The Income Tax Appellate Tribunal [ITAT] has set aside a disallowance of ₹1.84 crore in respect of Forum Homes Private Limited. The Tribunal observed that the payments made to entities based out of Singapore for providing architectural and structural design services are not liable to be taxed as Fees for Technical Services (FTS).
The assessee is a real estate development company that had undertaken a residential project at Bandra Kurla Complex. In the relevant assessment year, the assessee had entered into an agreement with two entities based out of Singapore namely Arc Studio Architecture along with Urbanism Pte Ltd and Web Structures Pte Ltd for rendering services relating to architectural drawings and structural design.
The assessee had paid an amount of ₹1,84,71,497 without deducting tax at source under Section 195 of the IncomeTax Act, 1961. The Assessing Officer treated such payments as FTS, considered TDS to be applicable and accordingly disallowed the total expenditure incurred under Section 40(a)(i) of the said Act.
The assessee had stated that the services consisted of only design and drawings for the specific project of real estate and there was no transfer of technology or skill that could be independently utilized.
The Revenue argued that the services were technical in nature and hence taxable in India, thus making it necessary to apply TDS provisions.
On examination of the agreements, the Tribunal found that none of the drawings, designs, and technical material belonged to the assessee and were intellectual property of foreign companies and could be used only for the specific project.
The Tribunal comprising Saktijit Dey [Vice President] and Makarand Vasant Mahadeokar [Accountant Member] further held that in absence of availability of technical knowledge as envisaged under Article12(4) of the India-Singapore DTAA, the payments could not be considered to constitute FTS. Thus, the TDS requirement did not arise.
As a result the Tribunal accepted the appellate authority’s decision and rejected the appeal of the Revenue, thus allowing deletion of the ₹1.84 crore disallowance.
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