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2011 (5) TMI 256 - AAR - Income TaxDetermination of taxable income - The salaries are paid out of the income of GTE-OC - The total income of GTE-OC may be the sum total of receipts under different heads of income, for example: business, royalties, fees for included services, house property, interest, dividends etc. but the expenditure incurred by way of salaries to the employees cannot ipso facto determine the nature of the income which is to be brought to tax either under the Act or under the DTAA in the hands of GTE-OC - Hence, the amounts paid by the applicant to GTE-OC represent income in the hands of GTE-OC - Accordingly charged to tax within the provision of section 195 of the Act. "Fees for Included Services (FIS)" -the memorandum of understanding of the DTAA it is clear that the services which are not in the nature of technical services, the make available clause would not apply - As the services provided by GTE-OC are in the nature of managerial services, the payments made by the applicant are covered under "fees for included services" under Article 12 (4) of the DTAA - As the services are managerial in nature, the payments are also covered under "fees for technical services" as defined under Explanation 2 to section 9(1)(vii) of the Act - Held that: "Fees for Included Services (FIS)" is taxable at the rate of 20% as provided under Article 12(4)(b) of the DTAA.
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