TMI Blog2015 (11) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... t implies also the power to make suggestions, advice on the concerned topic and area but if there is something more than the suggestion given i.e. if there is a transfer of some development or design and the person reviewing it monitor such transfer of design and development, then it cannot be a simple power of reviewing. We find that the lower authorities have not examined as to whether the suggestions given by M/s Liftech Consultant Inc., USA would amount to major change or improvisation of the design or were limited to just pointing out the shortcomings or defects, whatever it may be, in the already settled and agreed design of the product. Further, we do not find any record to suggest that whether M/s Liftech Consultant Inc., USA no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee is a resident Indian Company in terms of section 6 of the Act and is in the business of developing, constructing, operating and maintaining the port in Gujarat. The assessee had entered into a contract for purchase of cranes from M/s ZPMC, China. These cranes were supposed to be manufactured in China itself and on completion, ought to be imported in India. The assessee engaged M/s Liftech Consultants Inc., a company registered in USA, USA tax resident for review of design of the cranes which were to be supplied by the Chinese concern M/s ZPMC. The assessee had allowed credit to both the parties during financial year 2006-07 relevant to A.Y. 2007-08 and financial year 2007-08 relevant to A.Y. 2008-09 and has made payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cranes and monitor that the cranes meet the pre-determined set standards, which were already agreed to between the assessee and ZPMC. Since the assessee did not possess requisite technical expertise to closely monitor the adherence of set standards by ZPMC during manufacturing of the cranes, the assessee appointed Liftech Consultants Inc., USA to carry out the said task so that it can ensure the adherence to the agreed standards even before the cranes are installed in India. The assessee submitted that the reports as given by Liftech Consultants Inc., USA suggests that it is purely to review the pre-existing design, therefore there is no development and transfer of any technical plan or design so as to attract Article 12, clause (4) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIT vs. Preroy A.G. (2010) 39 SOT 187 (Mum) and various other related judgments. 5. The ld. D.R., on the other hand, has strongly supported the orders of authorities below. 6. After considering the rival contentions and submissions, and going through the agreement for engineering services for procurement and other aspects as appearing in the assessment order, we find that the service to be performed by M/s Liftech Consultant Inc., USA was more of a reviewing the design. The power of review is something more than the power of supervision. However, it is something less than the development and transfer of services and design. When we say that there is a power to review, essentially it implies also the power to make suggestions, advice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., USA has just suggested the development or has physically made available its presence through its officials to see whether those development and suggestions were actually implemented. If it is only suggestions given, then it will be review but if the M/s Liftech Consultant Inc., USA has forwarded to implement those suggestions on behalf of the assessee and have improvised the design or brought any major change in the design, then such suggestions would amount to transfer of technical services and design, which would be more than the power of review and would attract Article 12 of the India-US DTAA Treaty. 7. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 31st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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