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TMI Blog2012 (12) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... eficit good by making the payments towards the advance tax; (ii) that since the assessee failed to pay the advance tax, the Assessing Officer was right in charging interest u/s 234B and 234C of the I.T. Act, 1961." 3. Ground no.1 is regarding the fee for technical services. 3.1 The assessee is a company incorporated under the laws of England and is tax resident of United Kingdom. The assessee is in the business of providing television news services including audio-visual feed together with textural scripting information, desktop library services etc. to customers in India. The Assessing Officer noted that the assessee has received an amount of Rs. 12,71,822/- for rendering 'locational special' a service to a customers in India. 3.2 The Assessing Officer asked the assessee as to why the payment for rendering these services should not be treated as 'fees for technical services' as per sec. 9(1)(vii) of the I T Act and accordingly taxed as per Article 13 of the Indo-UK DTAA. 3.3 In response, the assessee submitted that the 'location Special' is a service wherein a customer asks the assessee to film a particular event, meeting, etc., Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - received by the assessee is for providing 'locational services' is in the nature of 'fees for technical services' and is taxation @ 15% as per Article 13 of the DTAA between India & UK. 4. On appeal, the Commissioner of Income Tax(Appeals), though has concurred with the view of the Assessing Officer to the extent that these services qualify to be treated as fee for technical services under the provisions of Sec. 9(1)(vii)(b) r.w Explanation 2. However, the Commissioner of Income Tax (Appeals) was of the view that the payment could not fall under the definition of fee for technical services as per Article 13 of the DTAA. Accordingly, the Commissioner of Income Tax (Appeals) held that the amount received by the assessee for making and producing the television film and not for making available any technical know-how, skill etc. Hence, in view of the Commissioner of Income Tax (Appeals), such receipts definitely constitute business income and in the absence of PE not taxable in India. 5. Before us, the ld DR has submitted that the assessee has not produced any details, agreement, bills/invoices/letters in respect of the work done for various customers to show the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits are attributable to the PE in India. For the year ended March 31, 2001, the assessee did not have PE in India as contemplated by Article 5 of the Treaty. Therefore the revenues earned by the assessee from rendering 'Location Special' services are not liable to tax in India, as per the Treaty. 5.2 The ld Sr counsel has submitted that the assessee has explained before the Commissioner of Income Tax(Appeals) in paras 4.3 as to why the revenues cannot be treated as "Fees for Technical Services" under Article 13 of the India - UK Treaty is inter alia defined as under: Payments of any kind in consideration for the rendering of any technical or consultancy services (including the provisions of technical or other personnel) which; a. are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3(a) of this Article is received. b. are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received c. make available technical knowledge, experience, skill, know-how or processes, or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person utilising the services is able to make use of the technical knowledge etc., by himself in his business or for his own benefit and without recourse to the performer of services in future. The technical knowledge, expertise, skill etc., must remain with the person utilising the services even after the rendering of the services has come to an end. Thus, the ld Sr counsel has submitted that the services rendered by the assessee is merely a production of film and not making available any technical services, expertise, knowledge etc., to its customers. He has also referred the decision of the Hon'ble Delhi High Court in the case of DIT v. Guy Carpenter & Co Ltd and submitted that the Hon'ble High Court has upheld the decision of the Tribunal in the case of Raymond Ltd. (supra). Thus, the ld Sr counsel has submitted that the assessee has provided only a product by utilising the technical expertise and not the technical services. 6. We have considered the rival submissions as well as the relevant material on record. There is no dispute as far as the issue is settled on legal principal by the decision of the Tribunal in the case of Raymond Ltd (supra). However, the law can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, there cannot be any doubt that these services will qualify to be treated as fees for technical services under the provisions of sec. 9(a)(vii)(b) read with Explanation 2. To that extent, reliance on the decisions of GVK Industries and Oberoi Hotels is also justified. However, coming to the taxability under the provisions of Article 13 of the Indo-UK DTAA, which deals with fees for technical services; it is a different ball game. Under Article 13 of the DTAA, fees for technical services means a payment for rendering of technical or consultancy service which make available technical knowledge, experience, skill, know-how or processes, or consists of development and transfer of a technical plan or technical design. Therefore, the point which needs to be satisfied for taxability under the DTAA is whether the appellant is making available technical knowledge, experience etc. to the customers for and on whose behalf location special services are rendered." 6.2 However, the Commissioner of Income Tax(Appeals) has finally held that the amount received by the assessee is for making and producing the television film and not for making any technical know-how, skill etc in para 4.4.4 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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