TMI Blog2020 (3) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... o other argument was advanced by the ld. DR of the revenue in this regard as to how the payment in question is a payment for royalty. Payment in question is payment for Commercial Experience provided by US AE of the assessee company to the assessee company - from various e-mails it cannot be said that any information was provided by Mr.Todd Brownrout or Mr.Colin Wheeler to the assessee company which can be said to be providing information about the commercial experience. Fees for included services - Any services to be considered as included service, it is essential that the services provider makes available experience, skill, know-how or process or transfer of assets, transfer of development and technical design etc. In the present case, as per the scope of work noted above and as noted by the AO in para-17 of the assessment order, the marketing team of the service provider i.e. US-AE used to generate customer leads using/subscribing customer data base, market research and analysis and online research data and hence, it is seen that the service provider has not made available any technical knowledge, experience, know-how, process or develop and transfer technical plan o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand raised by the AO of interest u/s 201(1A) of the Act for the same assessment years. All these appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. In each of these appeals, one of the grounds of assessee is this that the order passed by the AO u/s 201(1) and 201(1A) of the Act are time barred and in this regard, the assessee has placed reliance on the judgment by the Hon ble Karnataka High Court rendered in the case of Bharat Hotels Ltd (2016) 384 ITR 77(Kar.) as per ground no. 2.2 raised by the assessee in ITA No.490(B)/2019 and similar ground in all remaining appeals. 2.1 On merit, this is the grievance of the asessee that all these appeals relate to the impugned payment made by the assessee during these 7 years towards marketing services and fees for facilitation services and the same cannot be considered as fees for technical services (FTS) or royalty u/s 9(i)(vi) (vii) of IT Act, 1961 r.w. Article-12 of India-USA-DTAA. 3. Regarding time barring aspect, ld. AR of the assessee has placed reliance on the Tribunal order rendered in the case of Wipro Limited Vs Addl. CIT in ITA No.1215 to 1220(B)/2014 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emaining 6 years, it is seen that such grounds are raised only in three years i.e. 2012 13 to 2014-15 but since the orders for these years are passed within 6 years from the end of the relevant FY, we hold that these orders are not time barred. 4.2 As per the directions of the Bench, both sides have submitted synopsis and written submissions after the hearing was over and for ready reference, we reproduce the same herein below; SYNOPSIS by the learned DR of the revenue 1. Ground 1: General 2. Ground 2: Limitation 2.1. For the year under consideration as the law stood then or even now no period of limitation was is prescribed under section 201 for exercise of power thereunder in context of Non-Residents. Subsection 3 to section 201 was inserted vide Finance Act 2009 with effect from 01/04/2010. The objective of insertion of this section was explained in the memorandum to the Finance Bill 2009 which is reproduced in the order of CIT Appeal at page 28 (page 42 of Assessee's paper book). 2.2. The Memorandum clearly States that no time limits have been prescribed for the order under section 201(1) where the deductee is a nonresident as it may not be admin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble ITAT Bangalore in the case of Cross Tab Marketing Services Ltd (Para 50 on Pg 57 of CIT (A) and to ABB FZ LLC (Para 52), he came to the conclusion (at Para 58) that the payment is composite in nature. He therefore held that the payment for subscribing to customer data base, Market research and analysis, online research data etc is in the nature of Royalty. 3.2. It is further submitted that the information provided by the Non Resident entity to the assessee is not in public domain and is solely made available to assessee for economic benefit to be derived from such information. It is a case of payment for use of information concerning commercial experience and squarely falls within the definition of Royalty as per Article 12(3)(a) of Indo-US DTAA(DTAA and the relevant Article are at Page 123 of Assessee's Paper Book). 3.3. Strong Reliance is placed on the decision of Jurisdictional ITAT in case of TNT Express Worldwide (UK) (Annexure 9). 3.4. The Hon'ble ITAT, on similar facts, held that it appears to be a composite agreement for providing various services, some of which are purely business commercial practice contract services and others are in the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4.4 and 3.4.5: Exceptions to sec 9(1)(vii)(b): Not argued by Assessee's AR on 20/01/2020. 6. Ground 3.5: Make Available CIT(A) Para 60 Page 53 of his order [Pg 67 of Assessee's Paper Book]. 6.1. Attention is drawn to Article 12(4)(a) of the DTAA [Page 424 of Assessee's Paper Book]. If the Payment is ancillary and subsidiary to the application or enjoyment of the right, property or information for which payment of Royalty is made, then there is no application of Make Available clause. This clause is required to be satisfied ONLY if the payment is for technical or consultancy services falling within clause (b) of Article 12(4). Hence the arguments of the appellant are not tenable. 6.2. Notwithstanding the above contention, the requirement of Make Available is not confined to technology . As is clear from Article 12(4)(b), it involves making available 'technical knowledge', 'experience', 'skill', 'know how' OR processes. The word OR is important. The mail correspondence (provided by assessee during the proceedings) abundantly makes it clear that the experience and skill has been made available, thus satisfying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.8. Ld AR further argued that if the same was made available to it, why would it be making payment year after year. This argument is not tenable since the appellant is making repeated payments not only because it is more convenient for it to outsource this aspect but also for another important reason that there is constant up-gradation in the commercial information received. Reference may be made to Para 27 of AOs order at Pg 20 (Page 116 of Assessee's Paper Book) wherein the AO has observed that Services are being rendered and constantly up-graded especially with respect to the dynamic and creative solutions of advertising in order to maintain higher edge in the competitive US market and to boost the assessee's business and to, increase profits it is important to underline that US entity has to constantly perform critical analysis and updation of the market . This finding of the AO has not been disputed by the assessee. 7. Ground 3.6.1 to 3.6.2: Royalty (already discussed) 8.Ground 3.6.3 to 3.6.7 : Not argued by Ld AR on 20/01/2020. 9. Ground 3.7 : Royalty (already discussed) 10.Ground 4: Acceptance by Department in Proceedings u/s 143(3) r.w.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Written Submissions may kindly be taken on record, considered and adjudicated upon and the appropriate relief be granted for the advancement of substantial cause of justice equity. 2. FACTUAL MATRIX 2.1 Ad2pro Media Solutions Private Limited (Hereinafter referred to as the Appellant or AMSPL ) is a private limited domestic company engaged in the business of providing graphic design solutions for advertising and marketing communications services to its customers around the world. It is a provider of creative outsourcing services. The services offered are advertising, print online design, digital signage corporate identity. It has combined creative talent with process expertise and a technology backbone to create a unique on-demand Virtual Studio solution for its customers. Ad2pro India's goal is to help customers increase their creative capacity, reduce turnaround times and streamline the creative process. 2.2 As a part of its business strategy, the Appellant has a 100% subsidiary in US named Ad2pro Media Solutions Inc, (Hereinafter referred to as the AMSI ) based in California USA. AMSI provides marketing services to AMSPL. The consideration is based on Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax in ITA No. 1215 to 1220/Bang/2014. The relevant observations of the Hon'ble Bench are as under: 99. In view thereof, there is conflict of judgments of various courts. One set of judgment are in favour of the assessee and the other set of judgments are in favour of the Revenue. There is no direct judgment after the amendment of Section 201, by the jurisdictional High Court which deals with the issue of initiation of proceedings under the amended provision of 201. In the absence of any binding judgment by the Hon 'ble jurisdictional High Court, we are bound to adopt the same logic as upheld by the jurisdictional High Court, by treating the resident and the nonresident at par after relying upon the decision of Special Bench in the matter of Mahindra and Mahindra (supra), in case relating to pre amendment assessment year. In our opinion, after the amendment of law same logic and limitation is required to be applied for non-resident well as resident thus treating non-resident at par with resident. In other words, period of imitation for initiation of proceedings for resident as well as non-resident u/s 201 should be 6 years from the end of the financial year. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposals (RFP). o Leads are evaluated, and Qualified good leads are considered for taking forward. o Cold calls or e-mails detailing the services of the company are being sent to such leads. o Business meetings are set up with interested parties. o Requirements of the Client is being discussed and capabilities of Ad2pro India are being explained. o Client asks Ad2pro to send a proposal for services. o Ad2pro US facilitates the negotiations on terms and pricing taking feedback and inputs from Ad2pro India. o Final contract is sent to Client for review and acceptance. o Client reviews and sometimes may request for changes. o Once the contract is finalized it is executed between Client and Ad2pro India. Existing Client References o In many case promotions of Ad2pro's services happens through references provided by existing Clients. o New Clients, based on such references, approach Ad2pro US Marketing Team. o This is followed by Business meetings, understanding Clients requirements and sending a proposal. o Once all the terms are finalized, a Contract is executed between Client and Ad2pro India B) Collections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which is accruing or arising or deemed to accrue or arise in India, the provisions of Section 195 of the Act are applicable. The AO the CIT A have erroneously held that the payments made by the Appellant to AMS1 amounts to 'Fees for technical services' within the meaning of Section 9(1)(vii) of the Act. 4.8 The Appellant wishes to re-produce the provisions of Section 9(1)(vii) of the Act for ready reference: Income deemed to accrue or arise in India. 9.(1) The following incomes shall he deemed to accrue or arise in India:- (I'll) income by way of for technical services payable by (a) the Government; or (b) a person who is a resident. except where the fees are payable in respect of services utilized in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside india; or (c) a person who is a non-resident, where the fees are payable in respect of services utilized in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India: Provided that nothing contained in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for included services' which covers the definition of 'Fees for technical services'. The relevant provisions of the DTAA is reproduced herein below for ready reference; ARTICLE 12 ROYALTIES AND FEES FOR INCLUDED SER VICES 1. Royalties and fees for included services arising in a Contracting Slate and paid to a resident of the other Contracting State may be taxed in that other State 2 . 3 . 4. For purposes of this Article. fees for included services means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right. property or information for which a payment described in paragraph 3 is received; or (1)) make available technical knowledge, experience. skill. know-how, or processes, or consist of the development and transfer of a technical plan or technical design. [Emphasis Supplied] 4.11 Hence, as per the above definition, only those payments which arc made in addition to or incidental to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and media companies worldwide. The Appellant generates the Ideas and builds the technology that transforms the manner how businesses manage designs. In the instant case, the Appellant is an Expert. It cannot seek advice from the AMSI, USA which is merely a business facilitator. It is submitted that executor services involve actual carrying out of the services as stated in the contract. The advisory services involve advising the client how to carry out the activities 4.15 Reliance is placed on the following decisions of various courts: (i) CIT v. Grup Ism (P.) Ltd. [2015] 378 ITR 205 (Delhi); (ii) DIT v. Panalfa Autoelektrik Ltd. [2014] 227 Taxman 351 (Delhi); (iii) Adidas Sourcing Ltd. Asst. DIT (International Taxation) [2013] 21 ITR (Trib.) 697 (Delhi); (iv) Dr. Reddy Laboratories Ltd., [2016] 243 Taxman 127 (AAR New Delhi). 4.16 The Appellant submits that, in case of Dr.Reddy Laboratories 387 ITR 337 AAR, it was held that medical representatives of DRL Russia merely promote the goods by way of meeting doctors and pharmacies and their activities are executor in nature since such services do not entail the rendering of advice to the applicant. Therefore, execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, or processes, or consist of the development and transfer of a technical plan or technical design. Thus, under paragraph 4(b), consultancy services which are not of a technical nature cannot he included service - [Emphasis Supplied) 4.19 In view thereof, mere consultancy services which are not technical i.e., which is not in relation to transfer of any technical knowledge or knowhow and further which is not ancillary to payment of royalty cannot be treated as 'Fees for technical services' within the meaning of Section 9(1)(vii) of the Act and consequentially not liable for with-holding of tax at source. It is prayed that your Honours to hold accordingly in the interest of equity and justice. 4.20 Reliance is placed on the decision of the Kolkata Tribunal in the case of Onprocess Technology India Private Limited Vs DC1T in 1TA No. 1047/Ko1/2016 wherein the Hon'ble Tribunal has held that: 3. This Court had an occasion to consider this agreement in the case of CIT v. De Beers India Minerals (P.) Ltd. [2012] 346 1TR 467/208 Taxman 406/21 taxmann.com 214 (Kar.), where, after referring to various provisions of law, it was held that the question, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own benefit and without recourse to the performer of the services in future. The technical knowledge, expertise, skills etc. must remain with the person utilizing the services even after the rendering of service comes to an end [Emphasis Supplied] 4.21 Wherefore, it is prayed before this Hon'ble Bench to hold that the payments made by the Appellant to AMSI are not subject to with-holding of tax at. source under Section 195 of the Act in the interest of equity and justice. 4.22 Without prejudice to the above made averments, it is submitted that the transaction in the impugned case falls under the exception provided under Section 9(1)(vii)(b) of the Act. The relevant provisions of the Act are reproduced herein below: (vii) income by way of fees for technical services payable by (a) the Government; or (b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; or (c) a person who is a non-resident, where the fees are payable in respect of services utilised in a busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ognizes such time differentiation and provides separate tax rates for each such stream - the assessee is justified in comparing the rate of 10% and 20% (as per section 115A) separately and independently with the rate of 15% (as per Article 12 of the India-USA DTAA Treaty where a provision in the taxing statute is capable of two reasonable interpretations, the view favourable to the assessee is to be preferred. 4.26 It is also submitted that in the instant case, Appellant has customers in USA. It enters into agreement/contract with each of its customers separately. Therefore, it is submitted that even though Appellant is carrying on business in India, it is also earning income from outside India thereby satisfying the condition of the second limb. The services are rendered outside the India and services are utilized outside the India. Thus, the AO should appreciate that the appellant is earning income from source outside India in as much as it enters into contract with each of its customers situated in USA separately, each such contract is subject to laws of USA and each such contract constitutes 'source of income', thereby bringing the case of the appellant within the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained on the ground that the payment constitutes Royalty, is bad in law needs to be deleted. The learned CIT(A) has confirmed the finding of the learned assessing officer that the payments are Fees for included services. Wherefore, the learned CIT(A) ought to have restricted his finding to such extent or ought to have resorted to provisions of Section 251 of the Act and issues show-cause notice. The failure to issue show cause notice is fatal. 5.4 The Appellant places reliance on the following decisions of various courts in support of its contentions: (i) Saheli Synthetics (P.) Ltd. vs CIT [2008] 302 ITR 126 (Gujarat); (ii) CIT v. Rai Bahadur Hardutroy Motilal Chamaria [1967] 66 ITR 443; (iii) CIT v. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC); 5.5 With regard to the opinion of the CIT A that the payments are of composite nature and liable to be treated as Royalty, the Appellant submits that Learned CIT(A) artificially divided the agreement entered between the Appellant and AMS1, USA in to two parts, as one for providing consultancy services and another for subscribing customer data base. It is further submitted that Learned CIT(A) dedicated his order upto par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 is to the contrary. His observation in paragraph 27 is that the services were not one time service and the services are being rendered and constantly upgraded especially with respect to the dynamic and creative solutions of advertising in order to maintain higher edge in the competitive US market and to boost the Appellant's business and to cut costs and increase profits. This itself suggest that establishes that there is no imparting at all. 5.10 Wherefore, the payments cannot be construed as payment towards royalty or as a composite payment as alleged by the CIT(A) and hence not liable to withholding of tax at source under Section 195 of the Act. 6. SUBMISSIONS ON THE 'MAKE AVAILABLE' CLAUSE 6.1 With regard to the submissions of the revenue on the issue of on the issue of make available, the learned DR for the revenue has submitted that the payment made by the Appellant to AMSI involves making available of technical knowledge. In this regard it is submitted and reiterated that AMSI only provides commercial information about customers and customer leads and never reveals the methodology adopted or database utilized / borrowed / accessed in order to cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit and be in a position to utilise the technical knowledge, experience, skill, knowhow, or processes in future on his own without further recourse to the service provider. In other words, it requires that the service provider should make his technical knowledge, experience, skill, know-how etc. known to the recipient of the service so as to equip him to independently perform the technical function himself in future, without the help of the service provider. 6.5 In the instant case as submitted above, the services rendered by AMSI, USA are commercial in nature. It is rendered only to facilitate the business of the Appellant. The personnel of Appellantare not receiving any technical knowledge, skills, know-how from the services rendered by AMSI, USA. The Learned CIT(A) apparently has mixed up between 'services made available' and 'technology in services made available'. While the former is universal in all cases of service contract, the latter is by exception. It is trite that making available service is the primary requirement of any service contract. However, the critical question is not whether the service is made available, but whether the technology embedded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch information is obtained. It is also submitted by the ld. AR of the assessee that by virtue of the information made available to the payer by the service provider, the payer shall have requisite to obtain the said or similar information by himself without availing the services of the service provider. It is submitted that in the present case, the US AE of the assessee being the service provider did not make available to the assessee the know-how, technology and methodology used in rendering the aforementioned services to the assessee. It is further submitted by the ld. AR of the assessee that the US AE of the assessee i.e. AMSI only procures clients for the assessee who are located outside India and none of the clients or information provided by the AMSI pertains to India. It is further submitted that services provided by AMSI is nothing but marketing services for which payment is categorized by the assessee as marketing fees and the same is not covered by definition of fees for included services under the India-USA DTAA and consequently, assessee is not obligated to with-hold tax at source under the provisions of sec.195 of the Act. 6. The ld. AR of the assessee had placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue that it is noted by CIT(A) in para-32 page, page-36 of his order that one of the limbs of the marketing services is lead generation and the marketing team generates customer leads using/subscribing to customer data base, market research and analysis, online research data and he has referred to Tribunal order rendered in the case of cross Tab Marketing Services Ltd.1465-1467(B)/2012 s reported in 46 Taxman 146 and rendered in the case of ABB FZ LLC Vs DCIT as reported in 83 Taxmann.com 86 . Reliance was also placed on the Tribunal order rendered in the case of TNT Express Worldwide (UK) Ltd. Vs DCIT (Int. Taxation) in IT(TP)A No.6/Bang/2011 dated 29-042016 in which it was held that when there is a composite agreement for providing various services, some of which are purely business commercial practice contract services and others are in the nature of imparting the knowledge, experience, which concern the commercial or business experience such payment is in the nature of royalty . 7. This is one of the contentions raised by the ld. DR of the revenue that the assessee did not furnish the agreement relevant to assessment year and the copy of agreement given to CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f services received by the assessee and if the asessee does not bring the exact agreement before the lower authorities and before us to controvert the finding of the AO then we have to proceed on this basis that whatever is noted by the AO is the correct description of services received by the assessee. From the relevant para of the assessment order, it is seen that marketing team generate customer leads using/subscribing to customer database, market research and analysis, online research data and thereafter such leads are evaluated and qualified good leads are considered for taking forward and thereafter, cold calls or e-mails detailing the services of the company are being sent to such leads, and thereafter, business meetings are set up with interested parties. Thereafter, requirements of the clients is being discussed and capabilities of the assessee are being explained and thereafter, if the client is satisfied, client asks assessee to send a proposal for services which is followed by negotiations on terms and pricing. If the assessee agreed with the terms, contract is framed by the asessee and sent to USA(AE) for onward submissions to client and thereafter, final contract is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded services as defined in this Article, where the payer of the royalties or fees is the Government of that Contracting State, a political subdivision or a public sector company; and (B) 20 percent of the gross amount of the royalties or fees for included services in all other cases; and (ii) during the subsequent years, 15 percent of the gross amount of royalties or fees for included services; and (b) in the case of royalties referred to in subparagraph (b) of paragraph 3 and fees for included services as defined in this Article that are ancillary and subsidiary to the enjoyment of the property for which payment is received under paragraph 3(b) of this Article, 10 percent of the gross amount of the royalties or fees for included services. 3. The term royalties as used in this Article means: (a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic, or scientific work, including cinematograph films or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the royalties or fees for included services are attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply. 7. (a) Royalties and fees for included services shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority, or a resident of that State. Where, however, the person paying the royalties or fees for included services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for included services was incurred, and such royalties or fees for included services are borne by such permanent establishment or fixed base, then such royalties or fees or included services shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. (b) Where under subparagraph (a) royalties or fees for included services do not arise in one of the Contracting States, and the royalties relate to the use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of OECD Model Tax Convention where reasonable apportionment is not possible then the other part of the services could also be given the same treatment as a service provider which constitutes principles of contract and falling within the purview of royalty . Hence, it is seen that as per the facts of that case, the assessee supplied information to TNT India which was to be used by TNT India for its own account. In the present case, this is not even an allegation of the AO that any information was provided by the US AE of the assessee company i.e. Service Provider for use of the assesee company as per nature of services rendered by the AE of the assesssee company as noted by the AO in para-17 of the assessment order. In that para, it is noted that the AE of the assessee company used to generate customer lead by using/subscribing to customer data base, market research and analysis and on-line research data and after generating such leads it was acted upon to establish contracts of supply between the customer and the assessee company in some of the cases where both sides agreed. It is seen that in the present case, no information as such is provided by US-AE of the assessee company an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned and he has marked-up the attachment with specific questions. Hence, as per this e-mails also, it cannot be said that Mr.Todd Brownrout has provided some commercial experience. On page-63 of thepaper book filed by the ld. DR of the revenue is another e-mail from Mr.Kartic Srinivasan to Mr. Badrinarayanan on Nov.29, 2016 at 2.27pm. The ld. DR of the revenue has not commented about this e-mail and her comments are about e-mail dated 04-01-2017 available on page-65 of the paper book. This e-mail is sent by Mr.Todd Brownrout to Mr.Kartic Srinivasan on Jan 4, 2017 at 4.17pm. In this e-mail, it is stated by Mr.Todd Brownrout that one short term issue which they need to address is the APN agreement which has expired at that time and it was suggested that the extension of the agreement is required. 11. The next e-mail on which the comments are made by the ld. DR of the revenue is e-mail available on page-66 of the paper book which is an e-mail from Mr.Todd Brownrout CC to Mr.Kartic Srinivasan which is dated 07-04-2016. In this e-mail, Mr.Todd Brownrout has stated that he and Mr.Kartic Srinivasan will be meeting at Fairfax in 2 weeks to extend their agreement and he has requested fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAA i.e. fees for included services. 14.1 As per above discussion, we find that in the present case, the impugned payment cannot be said to be on account of royalty or fees for included services. At this juncture, we feel it proper to discuss and examine the applicability of the judgments cited by ld. AR of the assessee as noted above. 15. We first discuss and examine the applicability of the Tribunal order rendered in the case of M/s Adidas Sourcing Ltd. vs Asst. DIT(supra). In this case, it was held that to characterize a particular stream of income as fees for technical services, it is necessary that some sort of managerial, technical and consultancy services should have been rendered in consideration and the services rendered under the buying agencies we find the agreement are not technical services, but routine services offered in procurement of assistance. In the present case, the agreement in question is not procurement but for supply of services by the assessee company to an overseas customer but this tribunal order is applicable because the entire service rendered by the US AE is similar in connection with the sale of services of the assessee abroad and this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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