TMI Blog2013 (1) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... oyalty' in taxation-terminology has its distinct meaning and the amounts received by the assessee does not fall in that category. As far as taxing the receipts under the head 'Other Income' is concerned, it is to be opinion that residuary head is analogous to sections 56-57. If a certain receipt cannot be taxed under any other head, only then the sections dealing with 'Income from Other Sources', come into play in domestic taxation matters. Likewise, under the DTAAs, if a sum can be taxed under any other Article, provisions of Article 22 will not be applicable. Thus in light of the earlier decisions of the Mumbai Tribunal income received by the assessee-company form McKinsey India is not to be treated as Royalty-rath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The learned AO's order and finding on the evidence submitted is contrary to the details filed before him and also the Hon'ble DRP and is contrary to the record and order of the DRP. 4. The learned AO has erred in charging interest under Section 234B of the Act. The Appellant craves leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before or at the time of the appeal, to enable the Hon'ble ITAT to decide the appeal according to law." 2. Assessee, a foreign company, engaged in the business of providing Strategic Consultancy Services filed its return of income on 27-10-2007 declaring NIL income. Assessing Officer (AO) finalised the assessment on 30-08-2010 u/s. 143(3) r.w.s. 144C (13) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cide the issue of taxability by the assessee-company. He further observed that the Department had been treating the income of all the branches of McKinsey Co., Inc. located in the various parts of the world, received from the Indian branch, as fees for included services. Finally, he held that the fees received by the assessee in respect of services (which were consultancy/advisory services with no technology in it) rendered fell in the category of Royalty' in terms of Article 12 of the DTAA. 4. Assessee-company approached the DRP as per the provisions of section 144 of the Act. After considering the submission of the assessee, DRP held that provision of Article 22(3) of the DTA Treaty were applicable in the case under consideration. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Officer (39 ITD 355); Ericsson Telephone Corporation India AB v. Commissioner of Income-tax (224 ITR 203); McKinsey Company, Inc (Philippines) Others v. ADIT (99 TTJ 857); DDIT (IT) v. McKinsey Company, Inc United States Others v. ADIT (IT) (ITA No. 3483/ M/ 05); McKinsey Company, Inc. China Others v. DCIT (ITA No. 7239/M/02) and ADIT(IT) v. McKinsey Company, Inc. Belgium (ITA No. 3711/M/2006). 6. Departmental Representative (DR) submitted that particular articles had been incorporated in the DTAAs to deal with FTS, that provisions of Article 22(3) were rightly invoked by the DRP, that assessee did not furnish necessary details before the AO. DR relied upon the cases of Perfetti Van Melle Holding B. V., In re (AAR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... series of orders of Mumbai Tribunal i.e. McKinsey Company, Inc (Philippines) Others v. ADIT (99 TTJ 857); DDIT (IT) v. McKinsey Company, Inc United States Others v. ADIT (IT) (ITA No. 3483/ M/ 05); McKinsey Company, Inc. China Others v. DCIT (ITA No. 7239/M/02) and ADIT(IT) v. McKinsey Company, Inc. Belgium (ITA No. 3711/M/2006).After going through the orders of Group Companies of McKinsey where similar issue has been adjudicated in favour of the assessee, we are of the opinion that matter does need further deliberation from our side. AO has nowhere established that pieces of information supplied by the assessee were arising out of exploitation of the know-how generated by the skills or innovation of the persons who possesses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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