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2021 (10) TMI 443 - AT - Income TaxIncome accrued in India - Amount accrued to the Assessee from another group company in India on account of management support costs - FTS under the India- Singapore DTAA - principal and meaning of 'Make Available' - Assessee is providing services in the nature of operational support, accounting and legal support information technology related services etc.- assessee has challenged the treatment of Management support services charge on account of support services provided by the Assessee as Fee for Technical Services (FTS) under the India- Singapore Double Taxation Avoidance Agreement('DTAA') - CIT(A) held that the payment for management, support service is held to be FTS except for payment of Information Technology Services - HELD THAT:- As gone through the agreement and the TP study report of the IHG India with regard to the services provided. We find that the operational support such as Providing advice, information and competitive expertise to local general CMH Hotel management on the operation of Hotels in accordance with brand standards, maintaining the qualification available with regard to the international hotel business and its management techniques and Coordinating the managerial plan and actions, advising local general CMH Hotel management on trends and changes in the hotel business in general and provide advice on the production of operating and capital budgets at the level of the CMH Hotels, which are consistent with the strategic plan can at best be the managerial consultancy service but not the services made available so that the recipient can use or replicate the such services received from the assessee. With regard to accounting support the Bench has posed a pertinent question as to why not the accounting support given be treated as the technical knowledge 'made available'. It was answered that the accounting support given was in relation to the preparation of balance sheet and modalities and to advice production of reports regarding the budgets from time to time and the services are rendered repetitively based on the requirements of the clients and hence it cannot be treated as a service which was 'made available' to be applied independently and in times to come. We, after going through the type of services rendered, hereby concur with the explanation given by the ld. AR. Similarly, the services rendered in connection with training & recruitment and manpower specification, we find that there is neither technology transfer, knowledge transfer nor transfer of any skill or know-how. We hold that the provisions of the Article 12(4) could not be applied to the services rendered by the assessee in the strict sense of the provisions of DTAA. Hence, we hold that the decision of the ld. CIT(A) cannot be supported. Appeal of the assessee is allowed.
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