TMI Blog2023 (12) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 - ITAT DELHI] we hold that the fee for management support services received from Cameron Manufacturing India Pvt. Ltd. is not in the nature of FTS - Decided in favour of assessee. - Shri G. S. Pannu, Hon ble Vice-President And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Ms. Ananya Kapoor, Adv.; And Shri Amit Arora, C. A.; For the Department : Shri Vizay B. Vasanta, [CIT] - D. R. ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the final assessment order of the Assessing Officer dated 29.09.2019 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (the Act) pursuant to the directions of the DRP dated 26.08.2019 passed under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. 3. The ld. Counsel for the assessee, at the outset, submits that in so far as ground Nos. 2 and 3 are concerned, the assessee challenges the order of the Assessing Officer/DRP in considering the management support services fee received by the assessee as fees for technical services under section 9(1)(vii) of the Act and as per Article 12(4) of the India Singapore Double Taxation Avoidance Agreement (DTAA). The ld. Counsel for the assessee further submits that identical issue has been decided in favour of the assessee by the Tribunal for the assessment years 2013-14, 2014-15 and 2015-16 in ITA. Nos. 1 6/JPR/2017 and 7960/Del/2018 dated 24.03.2023 wherein the Tribunal held that the receipts from Cameron Manufacturing India Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices as FTS. 5.1 Briefly the facts relating to this issue are, the assessee had entered into an agreement with Cameron India for providing support and management services in the area of international purchasing, international marketing and sales, obtaining international quotations and tenders, coordinating sales, coordinating pricing policies, coordinating marketing strategies, sales administration, support in the area of accounting and finance, complying with standard statements of generally accepted accounting practice, other accounting activities, support in the area of planning, support in the area of tax and legal services, reviewing legal contracts, resolving local disputes and litigation, support in the area of information technol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ib.) 2. Magotteaux International SA Vs. DCIT [2022] 141 taxmann.com 8 (Delhi Trib.) 5.3 We have considered rival submissions and perused the materials on record. As could be seen from the facts on record, business support services were provided to a completely different entity in India through a separate agreement. It has no connection with the activity of the project office, which was set up only for the purpose of the contracts with Cairn India and ONGC. Therefore, we are convinced with the submissions of the assessee that the receipts from business support services have no link with PE, hence, its taxability has to be examined separately. In terms with the agreement with Camaron India the assessee is required to provide the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management in the area of information technology Assists in SAP implementation activities, SAP support services, SAP development activities, Web service activities and Help Desk activities Management fees would not make available technical knowledge, experience, skill, knowhow, or process to service receiver (CMI) 6. Human resources Assistance in providing support in the field of human resources and reporting requirements of CMI Management fees would not make available technical knowledge, experience, skill, knowhow or process to service receiver (CMI). 5.4 As could be seen from the nature of services, broadly it is managerial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough any cogent material brought on record. The nature of services enumerated earlier would make it clear that these are routine managerial and partly consultancy services to provide business support to the subsidiary. There is nothing on record to suggest that while rendering services, the assessee has made available any technical knowledge, know-how, skill etc. enabling the recipient of service to apply them independently. That being the case, in our considered opinion, the conditions of section 12(4)(b) are not satisfied. Therefore, we hold that the receipts are not in the nature of FTS. This ground is allowed. 6. On perusal of the final assessment order and also DRP directions we observe that the facts in the current assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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