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2015 (7) TMI 678 - ITAT BANGALORETransfer pricing adjustment - Taxing fees received by ABB Inc from ABB Limited and ABB Global Industries & services Limited - Held that:- The law is by now settled so far as the connotations of 'make available' clause in the definition of fees for technical services in the contemporary tax treaties are concerned. It is held to be a condition precedent for invoking this clause that the services should enable the person acquiring the services to apply technology contained therein. Hon'ble Karnataka High Court in the case of CIT v. De Beers India (P.) Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] approves this school of thought. We, therefore, hold that unless there is a transfer of technology involved in technical services extended by the US based company, the 'make available' clause is not satisfied and, accordingly, the consideration for such services cannot be taxed under Article 12(4)(b) of India US tax treaty. The Assessing Officer has taken pains to hold that the services are technical services in nature but what is really the decisive factor, so far taxability of its consideration in the Indo US tax treaty is concerned, is not the fact of training services per se but the position that training services being of such a nature that it results in transfer of technology. That is not the case here. It is not even suggestion of the Assessing Officer that there was a transfer of technology in this case so as to bring the services within the ambit of services which "make available" technical knowledge, experience, skill and know how etc. In our opinion considering the judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the foreign enterprise. As, in the light of the settled legal position as set out above, even if there is a DAPE on the facts of this case, it will have no taxable profits to be taxed in the hands of the assessee in the absence of the finding that the DAPE has been paid a remuneration less than arm's length remuneration. We, therefore, see no need to examine the aspect regarding existence of the DAPE. That aspect of the matter will be wholly academic. We are inclined to uphold the grievances of the assessee and delete the impugned additions in respect of the income of ₹ 11,04,11,826 under article 12(4)(a) as fees for technical services and also in respect of income of ₹ 4,37,161 under article 7(1) of the India US tax treaty. - Decided in favour of assessee.
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