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2022 (11) TMI 1313 - AT - Income TaxIncome accrued or arose in India - Income taxable in India - assessee provided fee for technical services “FTS” - India-USA DTAA - scope of “ make available” clause - whether AO had rightly invoked deeming fiction of income u/s. 9(1)(vii) read with Sec. 9(2) Explanation that mere absence of payee/assessee’s permanent establishment “PE” in India would not be fatal to the Revenue’s cause? - HELD THAT:- Assessee herein a USA based entity had entered into a service agreement with the payer M/s. Wipro Ltd.(Indian Company) providing the impugned services through the latter’s group company in USA to M/s. McDonald’s Corporation(USA) in USA only regarding the four folded services i.e. Cloud Infrastructure Managed Private Cloud, Colocation, Mainframe and Data Recovery services. Revenue could hardly dispute that the even if we agree to Revenue’s arguments under section 9(1)(vii) r.w.s. 9 (2) Explanation that the above services give rise to application of Sec.9’s applicability the assessee is found very well entitled for the benefit of India USA double taxation avoidance agreement “DTAA” u/s 90(2) of the act wherein Article 12 (4) (b) stipulates taxability of the income arising therefrom only if the services concerned “make available technical knowledge” to the recipient/payer Revenue could not refer to any material in the case file satisfying the forgoing “make available” condition in assessee’s services. This tribunals recently in M/s. Faurecia Automotive Holding [2019 (7) TMI 402 - ITAT PUNE] holds in light of CIT V/s. De Beers India Minerals Pvt. Ltd.[2012 (5) TMI 191 - KARNATAKA HIGH COURT] that such “ make available” condition stipulates that the payer concerned is independently able to make use of the technical know-how etc. coming from the service provider’s side . We thus affirm the CIT(A)’s findings reversing the Assessing Officer’s action holding the amount in issue as taxable in India. The Revenue’s instant sole substantive grievance fails accordingly.
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