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2018 (11) TMI 1604 - AT - Income TaxIT Services rendered qualify as FTS as per the DTAA - DRP held that assessee company satisfies “make-available” condition under India- Belgium DTAA - AO held that Services provided by the assessee company are in the nature of IT support services or routine information technology related work which is not very complex/ highly technical in nature - HELD THAT:- These services do not make available any know-how or skill and do not fall within the ambit of FTS as defined in Article 12 of the India-Belgium DTAA read with India-Portugal DTAA. The submissions of the DR that the assessee company is providing make available services and the services are interlinked has not been supported by any documentary evidence which was produced by the assessee company during the assessment proceedings. The DE BEERS INDIA MINERALS (P.) LTD. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] held that the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. The Hon’ble High Court further held that Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. In other words, payment of consideration would be regarded as "fee for technical/included services" only if the twin test of rendering services and making technical knowledge available at the same time is satisfied. In the present assessee company’s case, the services provided by the assessee company are that of IT support services which are merely in the nature of routine IT support services and availing such services in no manner has given any benefit to MIPL with technical knowledge, skill or expertise to be able to apply it in future to perform the functions independent of the assessee company. Thus, the twin test is not fulfilled in the present case. Therefore, the Assessing Officer was not justified in making additions in this aspect. Surcharge and cess on the gross treaty rate of 10% applicable on fees for technical services - HELD THAT:- AR relied upon the decision of Elektrobit Automotive GmbH vs. DCIT [2018 (5) TMI 1861 - ITAT DELHI] wherein the Tribunal held that education cess is only a surcharge as clarified by the Finance Act and surcharge is only a tax clarified in case of CIT vs. K. Srinivasan [1971 (11) TMI 2 - SUPREME COURT therefore, education cess or any other surcharge should not be added separately to the tax rate as per the DTAA. The Tribunal relied on the coordinate Bench decision in the case of Osram India Pvt. Ltd. vs DCIT [2015 (12) TMI 1793 - ITAT DELHI] to come to this conclusion. Thus, the issue is squarely covered in favour of the assessee.
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