TMI Blog2022 (2) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... of its order that as per the service agreement, the services provided by the assessee are in the nature of routine support services which are not very complex in nature. Considering the protocol to the India Belgium Tax treaty, tax treaty between India and Portugal has to be considered for most favourable nation clause. Under the India Portugal Trade Tax Treaty, fees for included services is defined as consideration for rendering of any technical or consultancy services if such services are ancillary and subsidiary to the application or enjoyment of the right, property or information of which royalty payment, as defined under Article 12(b) is received or make available technical knowledge, experience, skill, know how or processes or con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Respondents : N. C. Swain , CIT-DR ORDER Per N. K. Billaiya, Accountant Member This appeal by the assessee is preferred against the order dated 26.12.2014 framed under section 144C(13) r.w.s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] pertaining to Assessment Year 2011-12. 2. The grievances of the assessee read as under: 1. That on the facts and circumstances of the case and in law, the order passed by the Assessing Officer ( AO ) is bad in law as well as in facts. 2. That on the facts and circumstances of the case and in law, the AO/Dispute Resolution Panel ( DRP ) has erred in holding that the business support services provided/rendered by the Appellant qualify as fees fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inistration and other services. Such services are provided by the assessee from outside India. 6. During the course of scrutiny assessment proceedings, the Assessing Officer looked into the actual nature of remittances/receipts and found that it comprised of three streams of income, namely, royalty, fees for technical services and interest. 7. On a query raised by the Assessing Officer, the assessee gave a break-up of the income, which, it has all along claimed as absolutely exempt. The details given by the assessee are as under: i) Group Management Fees : ₹ 1,44,08,953/- ii) Royalty : ₹ 1,19,38,913/- iii) Interest on ECB : ₹ 38,07,451/- 8. The quarrel is in respect of group management fees of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces provided by the assessee may qualify as technical services only where they make available technology, know-how, skills, processes, experience etc. to MIPL. It was brought to the notice of the Assessing Officer that the services rendered by the assessee do not make available technology, skill, know-how etc. to MIPL. 13. Dismissing the contention of the assessee, the Assessing Officer was of the firm belief that the services rendered by the assessee do make available knowledge, experience, know-how to the recipient and this is clearly visible when one examine the nature of the services rendered and the consequential benefits obtained by the recipient. 14. The Assessing Officer also dismissed the contention of the assessee that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Cash Management services N 5 - Performance Management services N 6 - Quality Control, Safety and Environment services N 8 - Production Allocation services N 10 - Marketing services N 11 - Global Sales Coordination services N 12 - Procurement services N 15 - New Projects and Industrialization services 19. A perusal of the afore-stated services clearly show that these are routine in nature and definitely do not make available experience, know-how to the recipient MIPL. In fact, the DRP itself has accepted at Para 6.2 of its order that as per the service agreement, the services provided by the assessee are in the nature of routine support services which are not very complex in nature. 20. Considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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