TMI Blog2021 (10) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... independently nor any developed drawing or design have been provided to the assessee which can be applied by the assessee independently. Thus, it is very much clear, the conditions of Article 12(4) of the tax treaty are not fulfilled. Though, the assessing officer has generally observed that in course of providing services to the assessee, the non-resident entities have made available technical knowledge, know-how, processes to the assessee. However, no substantive material has been brought on record by him to back such conclusion. Even, before us, learned departmental representative has not brought any material to demonstrate that conditions of Article 12(4) have been fulfilled in the facts of the present case. No valid reasons to interfere with the decision of learned Commissioner (Appeals). Accordingly, we uphold the order of learned Commissioner (Appeals) on the issue by dismissing ground raised. - I.T.A. No. 5804/Mum/2018 - - - Dated:- 4-10-2021 - SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) Appellant by : Shri N Padmnabhan, Sr.DR Respondent by : Shri Nitesh Joshi, AR ORDER Per Saktijit Dey (JM): This is an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer was of the view that the payments made by the assessee are in the nature of fees for technical services (FTS) as per section 9(1)(vii) of the Income Tax Act, 1961. Therefore, he called upon the assessee to explain why the payment made to the non-resident entities should not be disallowed under section 40(a)(i) of the Act for alleged failure to deduct tax at source. 4. In submissions made before the assessing officer, the assessee objected to the proposed disallowance. It was submitted by the assessee that, since, the nonresident entities are resident of Singapore, the provisions of India-Singapore Double Taxation Avoidance Agreement (DTAA), being more beneficial, would be applicable. It was submitted, as per Article 12(4) of the tax treaty, unless, in course of providing any managerial/technical or consultancy services, technical knowledge, experience, skill, know-how or processes are made available to the recipient of such service, so as to, enable him to apply the technology independently, it cannot be termed as FTS under the tax treaty. The assessing officer, however, was not convinced with the submissions of the assessee. Referring to certain terms contained in the agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the fees cannot be considered as FTS. Further, in support of his contention, the learned counsel for the assessee relied upon the following decisions:- 1. Gera Developments (P) Ltd vs DCIT(International Taxation)-1, Pune (2016) 72 taxmann.com 238 (Pune-Trib) 2. ITO vs M/s Bengal NRI Complex Ltd ITA No.1290/Kol/2014 ITA No.1088/Kol/2014 3. CIT vs Dee Beers India Minerals (P) Ltd (2012) 21 taxmann.com 214 (Kar) 8. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Undisputedly, the assessee, at the relevant point of time, was developing a residential project at BKC. In connection with the development of such project, the assessee had availed certain technical/consultancy services from three non-resident entities located in Singapore. For availing such services, the assessee has paid certain amount to the non-resident entities. The short issue arising for consideration before us is, whether the payment made by the non-resident entities can be termed as FTS under Article 12(4) of India Singapore Tax Treaty. For better appreciation, Article 12(4) of the tax treaty is reproduced hereunder:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as could be seen, the scope of work is limited to various types of drawings and designs for the residential project being developed at BKC. On further verification of facts on record, it is evident that insofar as Arc Studio Architecture + Urbanism Pte Ltd is concerned, it will provide an illustrative site/roof plan showing all the components of the project, general landscape, recommendation and overall infrastructure elements, such as, entry driveways and service circulation, Diagram showing each of the major public at 1:200 scale, image board to describe the architectural character of the project etc. The scope of work also requires the entity to prepare schematic design drawings, approved by the client, in case of minor adjustment. The terms of the agreement make it clear that the design, drawing, rendering, model, specification, electronic files including database and spreadsheets and other derivation that are part of the project will remain the intellectual property of the service provider and are intended for use solely with respect to the project. It further restrains the assessee from utilizing such intellectual property for any other project or for addition to the subject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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