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2023 (1) TMI 42 - AT - Income TaxIncome deemed to accrue or arise in India - FTS under the India-USA DTAA - receipts on account of provision of information technology and other administrative services to its affiliate in India are in the nature of Fees for Included Services [FIS] under the India – USA Double Taxation Avoidance Agreement [DTAA] - assessee is incorporated under the laws of USA and is engaged in the manufacture and supply of life science research, healthcare, analytical chemistry and other markets with broad range of products and systems - HELD THAT:- Facts on record show that the recipient of the services is not enabled to provide the same service without recourse to the service provider, i.e, the assessee. In our humble opinion, mere incidental advantage to the recipient of services is not enough. The real test is the transfer of technology and on the given facts of the case, there is no transfer of technology and what has been appreciated by the Assessing Officer/ld. CIT(A) is the incidental benefit to the assessee which has been considered to be of enduring advantage. In order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. As relying on GUY CARPENTER & CO. LTD. [2012 (5) TMI 31 - DELHI HIGH COURT] and DE BEERS INDIA MINERALS (P.) LTD. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] we are of the considered view that the service recipient of the assessee is unable to make use of the said technology only by itself in its business or for its own benefit without recourse to the assessee year after year. We find that the Assessing Officer has referred to various decision which are based upon the decision of the Authority for Advance Rulings in the case of Perfetti Van Melle Holding B.V. [2011 (12) TMI 17 - AUTHORITY FOR ADVANCE RULINGS] which has subsequently been reversed by the Hon'ble High Court of Delhi [2015 (1) TMI 239 - DELHI HIGH COURT] and hence is no longer a good law. We are of the considered view that the receipts of the assessee on account of provision of information technology and other administrative services to its affiliate in India are not in the nature of Fees for Technical Services under the India USA Double Taxation Avoidance Agreement and we, accordingly, direct the Assessing Officer to delete the same. Appeal of assessee allowed.
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