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2022 (10) TMI 1049 - AT - Income TaxIncome deemed to accrue or arise in India - payments received by the assessee for rendering certain services to the Indian companies as per the terms of “General Services Agreement” (GSA) - Whether qualify as “Fees for included Services” (FIS) u/s 12(4)(b) of the India- USA DTAA? - HELD THAT:- Activities of the assessee is related to the GSA which the assessee was entered in agreement on 02.06.2003. The GSA receipts are not taxable under Article 12(4) of India-USA DTAA. From the memorandum of understanding, it is, obvious that as provided in clause 4B of Article 12 of the India-USA DTAA, that if the technical and consulting services made available are technical knowledge, experience, skill, know howor process orconsistthe development and transfer of a technical plan or technical design are considered to be technical or consultancy services. As also clarified that consultancy services not of technical nature cannot fall under “Included Services”. In view of this memorandum of understanding between two sovereign countries, the consultancy services which are technical in nature alleging to be included as technical and consultancy services for the purpose fees for included service as per sub-clause 4B of Article 12 of DTAA between India –USA. While undertaking the above services, the assessee had not executed any contract to make anybusiness. So, as to use services independently by applying the technology. All the services undertaken by the assessee or either support service IT enable services; co-ordination of tax services as rendered above are not stage which request transfer of technology receipts to skill company. We are fully relied on the order of the coordinate bench in this issue and the addition amount - Decided against revenue.
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