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2022 (12) TMI 881 - AT - Income TaxIncome deemed to accrue or arise in India - Taxability of amount received for Consulting and Engineering services as Fees for technical services (FTS) - India-UK Double Taxation Avoidance Agreement - Management Fees & Common Cost recharge - HELD THAT:- As decided in own [2019 (4) TMI 605 - ITAT MUMBAI] held the amount received towards consulting engineering services to be not in the nature of fees for technical services, the reasoning of the departmental authorities with regard to cost recharge would also fail, since, they have treated it as ancillary and incidental to consulting engineering services. The, contention of the learned Departmental Representative that the cost recharge fails various tests, such as, need test, benefit test etc. is unacceptable, it is contrary to the finding of the Departmental Authorities. Once, the Departmental Authorities have treated the amount received towards cost recharge to be in the nature fees for technical services, it implies rendering of service by the assessee. Therefore, applying the very same reason on the basis of which we have held the amount received towards consulting engineering services to be not in the nature of fees for technical services as discussed above, we hold that the amount received towards cost recharge cannot be brought to tax in India in the absence of PE. Therefore, the additions made by the Assessing Officer are hereby deleted. - Decided in favour of assessee.
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