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2012 (9) TMI 293 - AT - Income TaxIndia-Denmark DTTA - amount received towards assessee's share of shared IT Global Portfolio tracking system - assessee in the present case is a non-resident company incorporated under the laws of Denmark - Held that:- The payments received by the Assessee are for providing a facility to its agents as that the payment received is nothing but a payment by way of reimbursement of the cost for providing a particular facility - AO in coming to the conclusion that the payment was for fee for technical services has relied on the fact that there has been use of sophisticated equipments, this by itself will not be sufficient to holding technical services being rendered. As decided in CIT v. Bharati Cellular Ltd.(2008 (10) TMI 321 - DELHI HIGH COURT) that to call a payment as fee for technical service, the payment should be for use of human skills and where only machines perform or give some services that would not be enough to call a payment a payment for FTS - As submitted by DR that the basic data is entered by human effort and therefore the payment should be treated as FTS cannot be accepted because ultimately the machine only performs and no human element is involved - that the huge cost for installation of the system and the huge payment made by the Assessee by itself is an indication that the payment is FTS is without any merit as the percentage of payment received by the Assessee towards reimbursement compared to the total receipts in the form of freight etc., from shipping business in India is less than 1%. Thus the receipt in question cannot be considered as Fees for Technical services rendered. The amount in question received by the assessee from MIPL, MLIL and SIPL was not in the nature of FTS and the same being part of the income from shipping business was not taxable in India as per Article 9 of the DTAA since the place of effective management of the assessee company is situated in Denmark - in favour of assessee.
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