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2023 (10) TMI 299 - AT - Income TaxIncome accrued in India - Fee for Technical Services [FTS] - 'make available’ clause satisfied or not? - AO treated the management fee received by the assessee under administrative support agreement as fee for technical services read with article 12(4) of Indo Singapore DTAA - whether services of the nature of Management Support, treasury Support, Legal Support, Information & Communication and Human Resources are not of the nature of FTS as 'make available’ clause is not satisfied in case of these services? - as submitted employee of the assessee visited India in connection with rendering of these services and the recipient was enabled to derive benefit of enduring nature from receipt of these services thus satisfying the 'make available’ clause.” Assessee is a company incorporated under the laws of Singapore and is engaged in the business of providing transportation, logistics and supply chain solutions. The principle activities of the assessee are in the nature of management and support activities to its subsidiaries and related corporation in the Asia Pacific region - HELD THAT:- Since in the instant case, the training was for intimating the employees employed by India affiliate regarding the standard steps to be followed in executing an order / trade / business. This improves customer satisfaction and helps in reducing overall cost for the Indian affiliate / organization. 25. We observe that training per se, would not result in make available of technology, experience, skill processes, etc., unless the training involves the transfer of technology, processes, skills, etc., to the recipient in a manner which enables the recipient to apply the technology and to derive benefit therefrom without recourse to the tutor, it would not fall within the expression "technical services" as defined in the Treaty. Such trainings do not ‘make available' technical knowledge, experience, skill, know-how or processes. There was no transfer of technology. It merely facilitated the employees of the appellant to work in accordance with the expected standards. Thus, the training did not ‘make available’ any technical knowledge, experience, skill, know-how or processes. In the case of Exxon Mobil Company India Pvt. Ltd. [2018 (3) TMI 938 - ITAT MUMBAI] considered the payment made by assessee to Singapore based Company for providing legal support services including management consulting functional advise, administrative, technical, professional and other support services and held that since foreign company had not made available any technical knowledge, expertise, skill, knowhow or process which enabled assessee to apply technology contained therein on its own payment made by assessee could not be considered as fees for technical services as defined under article 12(4)(b) of Indo Singapore DTAA while holding so the Tribunal considering the decision of De Bears India Mineral Pvt. Ltd [2012 (5) TMI 191 - KARNATAKA HIGH COURT] Thus we hold that the marketing and sales services, operations and standardization services do not satisfy the “make available” clause as per article 12(4)(b) of Indo Singapore DTAA and, therefore, the amounts are attributable for these services cannot be held to be fees for technical services. Decided in favour of assessee.
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