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2015 (7) TMI 985 - AT - Income TaxFees received under consulting agreement from Wokhard Hospitals and M/s Carol Info Services are taxable as “Fee for included services - The tax authorities have examined only the agreements and have drawn conclusion against the assessee. They have not examined about the nature of services actually provided or delivered by the assessee to the Indian entities. In our considered view, one may not be able to come to a conclusion about the nature of services provided unless the actual services/deliverables are examined. Then one shall be in a position to ascertain as to whether the services or techniques provided was mere commercial information or a technique made available to the assessee. We may elucidate this point with an example. Let us assume that a financial consultancy firm provides consultancy services for “Cash management system”. It may provide various techniques to be followed to achieve the objective of effective cash management. The said techniques may be followed by the recipient of services even in the absence of the financial consultancy firm. In that case, the question that requires to be examined is whether the financial consultancy firm has made available the technology related to Cash management system or not within the meaning of the provisions of Indo-USA DTAA. In the absence of such kind of examination from the side of tax authorities, we notice that the Tribunal also has proceeded to adjudicate the issue by considering the agreements only. In the absence of such kind of intricate details, we are also not in a position to examine the nature of services vis-à-vis the products/package, if any, delivered by the assessee. Since the Tribunal has consistently taken a particular view in the earlier years and since there was no deeper examination done by the tax authorities, we are inclined to follow the decision rendered by the Tribunal in the earlier years. Accordingly, by following the order passed by the Tribunal in the earlier years, we set aside the orders of Ld CIT(A) in AY 2006-07 and the assessment orders passed on the above said issues in AY 2007-08 to 2009-10 and direct the AO to delete the addition of all the receipts discussed above. - Decided in favour of assessee.
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