TMI Blog2022 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ous objection to it. In view of the fact that certain crucial evidence for the decision is not available on record and further certain evidence filed as additional evidence has not been examined by the authorities below, we are of the considered opinion that it would meet the ends of justice if the impugned order on this score is set-aside and the matter is remitted to the file of the AO. We order accordingly and direct him to determine the precise nature of services rendered by the assessee to NWIL and then determine its taxability or otherwise. Needless to say, the assessee will be providing all the necessary details as called for by the AO for a proper determination of the issue. - ITA No.04/PUN/2021 - - - Dated:- 1-11-2022 - Shri R.S. Syal, Vice President And Shri Partha Sarathi Chaudhury, Judicial Member For the Assessee : Shri Ketan Ved For the Revenue : Shri Prashant Gadekar ORDER PER R.S.SYAL, VP : This appeal assails the correctness of the final assessment order dated 23-03-2020 passed by the Assessing Officer (AO) u/s.143(3) r.w.s.144C(13) of the Income-tax Act, 1961 (hereinafter also called the Act ) in relation to the assessment year 2016- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudicial to the interest of the revenue on this count. The assessee appealed against the orders passed u/s 263 for these years, which were allowed by the Tribunal on preliminary legal issues without going into the merits of the issue. The ld. AR submitted that out of the immediately two preceding years, one was not taken up for scrutiny and for the second year, the addition made by the AO is pending adjudication before the ld. CIT(A). On a specific query as to the position prior to the A.Y. 2011-12, the ld. AR candidly admitted that the assessee suo motu offered similar receipts for taxation for the A.Ys 2008-09 and 2009-10 and further that there is no change in facts or law for such two years and the year under consideration. Thus, it is ostensible, that on one hand the assessee has shifted its stand from taxability to non-taxability and on the other there is no adjudication so far by the Tribunal on the point. 5. Coming back, it is seen that the AO held the amount to be chargeable to tax under the Act as well as the DTAA. The ld. AR fairly accepted the taxability of the amount u/s.9(1)(vii) of the Act. His only challenge is to the taxability under the DTAA. It is axiomatic t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receding the word `know-how and joined by commas between themselves, indicates that the term `make available is applying to the words starting from `technical knowledge and ending with processes . The second use of the word `or in clause (b) after the word `processes and before `consist of the development and transfer of a technical plan or technical design deciphers that a new independent context is starting after the second `or , which deals with the services that consist of the development and transfer of a technical plan or technical design. Thus, it is manifested that the only requirement to rope in an amount within the ambit of `fees for included services under the second segment of para 4(b) of Article 12 is that the consultancy or technical services should consist of the development and transfer of a technical plan etc. to the payer. Unlike the first segment, there is no further requirement of satisfying the test of `make available . This discussion shows that there are two different air tight limbs of para 4(b) of Article 12 mutually exclusive from each other and if a case falls in either of them, it amounts to fees for included services. 8. With the above backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to royalty; and if the real nature of service is that the IT services have resulted into development of a technical plan or design etc., it may amount to fees for included services under the DTAA. Thus, the infallible conclusion is that ascertaining the precise nature of work done by the assessee for NWIL is of fundamental importance to settle the taxability or otherwise of the amount in India. 9. In this regard, the ld. AR was directed to show the exact nature of the services rendered by the assessee to NWIL. He referred to page 462 onwards of the paper book, which is a `Report of Independent Accountants submitted to the management of Nalco India Limited. There are certain Schedules to this Report, which basically specify the amount of total costs incurred; and the amount and the manner of allocation of such costs to the assessee under the different heads. Total costs incurred are 74002860 USD, out of which the assessee has been charged with a total of 926951 USD. Page 463 contains a break-up of the costs recovered from NWIL totaling 9,26,951 USD under different heads with varying allocation keys. From the allocation of costs on the basis of different keys to the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the: Parent agrees to provide Affiliate with summary of actual costs incurred by it in providing Services to Affiliate and related Markup for each year after the end of that year . Ergo, it is clear from the above clauses of the Addendum to the Agreement that the assessee was obliged to maintain all the necessary details and record of services and the expenses incurred thereon. Since such details were not readily available with the ld. AR, he requested that the matter may be sent back to the AO/TPO for fresh determination of the issue in the light of all the relevant information/evidence. The ld. DR did not raise any serious objection to it. In view of the fact that certain crucial evidence for the decision is not available on record and further certain evidence filed as additional evidence has not been examined by the authorities below, we are of the considered opinion that it would meet the ends of justice if the impugned order on this score is set-aside and the matter is remitted to the file of the AO. We order accordingly and direct him to determine the precise nature of services rendered by the assessee to NWIL and then determine its taxability or otherwise. Needless to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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