TMI Blog2021 (2) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... xperience, skill, knowhow in terms of Article 12(4)(v) of the DTAA - HELD THAT:- The assessee during the assessment year 2011-12 has categorically mentioned that the nature of these operations is purely logistic support provided by the assessee for shipment of transport of goods perform outside in India and the contract is entered between expertise international India Pvt. Ltd. and the customers i.e. at the consigner sent in the case of expert of Consignment from India to overseas countries found USA and between the assessee and the customer that is at the consignment end in the case of import of consignment from other countries i.e. USA to India. As regards GAM charges/expenses, the cost of these group is allocated to a respective count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his appeal is filed by the assessee against the order dated 15/01/2016 passed under Section 143(3) read with Section 144C of the Income Tax Act, 1961 passed by DCIT, Circle 1(2)(2) New Delhi, for Assessment Year 2010-11. 2. The grounds of appeal are as under:- The Appellant respectfully submits:- 1. That on the facts and in the circumstances of the case and in law, the order passed under section 144C of the Income-tax Act, 1961 ( the Act ) by the Learned Assessing Officer ( Ld. AO ) is erroneous and bad in law as well as in facts. 2. That the Ld. AO and Ld. Dispute Resolution Panel ('Ld. DRP') on the facts and in the circumstances of the case, has erred in holding that the cost allocation of international freight lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forwarding of Air Ocean freight. Additionally the group also provides services related to distribution management vendor consolidation Cargo Insurance, purchase order management and Customise logistics information and value added Services. The customers of the Group include retailers and wholesalers, and electronics and manufacturing companies around the world. The operations of the Group span over United States, North America, Far East, India, Europe, Australia, New Zealand, Latin America, and the Middle Eastern countries. The assessee, incorporated in USA, operates in three primary segments: airfreight, ocean freight ocean services, and customs brokerage and other services. The assessee provides similar services globally through wholl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Royalty income 35,43,86,010/- 3 International Freight Logistic Services 2,58,72,66,319/- 4 Reimbursement of Global Account Management Expenses 2,46,73,043/- 5 Sale of consumables 10,08,768/- 6 Cost reimbursement received 76,70,102/- 7 Lease line charges received 10,90,173/- Out of the above receipts, the assessee has declared the royalty income in its return of income. Further, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has held that services i.e. GAM re-imbursements and cost allocation of International Freight Logistic Support Services do not fall within the purview of managerial, consultancy or technical services and hence, neither falls under Section 9(1)(i) or Section 9(1)(vii) nor under Article 12 of the DTAA. 5. The Ld. DR submitted that in Assessment Year 2010-11, the Tribunal has not considered the agreement as well as the DRP is also silent on the terms and conditions of the agreement. But in the present Assessment Year i.e. 2011-12, the agreement was considered by the DRP and it is very much applicable in the present assessment year regarding addition on account of releasing of GAM charges and addition on account of cost allocation of intern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of operations in India. Thus, the payment received by the assessee neither falls under Section 9(1)(i) or Section 9(1)(vii). Hence, we hereby decline to interfere with the directions of the Dispute Resolution Panel in this case. After going through the directions of DRP as well as the agreements in consonance with present Assessment Year, it is found that the activities mentioned by the assessee do not fall within the purview of Managerial/Consultancy or Technical Services. Thus, the payment towards the same cannot be treated as technical Services. The Support Services are very much of a general services in nature and does not require any Managerial/Technical or Consultancy Expertise. The assessee during the assessment year 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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