TMI Blog2023 (1) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... de available to the person purchasing the service, within the meaning of paragraph 4(b). Similarly, the use of a product which embodies technology shall not par se be considered to make the technology available. This aspect was considered by CIT(A) and it was found that by virtue of the said agreement there is no transfer of a technical plan or technical design and what was transferred through the agreement was commercial information. Upon analysis of the agreement it was found that the agreement is purely advisory services and such advisory services cannot be treated as fees for included services under Article 12(4)(b) of the Indo-US Treaty since there is no technology which is made available. Tribunal upon reconsideration of the factual position found that the clauses in the agreement would clearly show that the nature of services is advisory in nature and nothing has been made available to TIL by the assessee. As not in dispute that the assessee does not have any permanent establishment in India and, income so arising to them in India cannot be taxed under Article 7 as business profits either. The assessee and the TIL had filed a writ petition before this Court challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of fees for technical services. Assessee is not the ultimate beneficiary of the sum in question nor did it render any service to TIL. Further, there was no evidence which was brought on record to show that the technical skill, knowledge etc. were made available to TIL by the assessee. Transfer Pricing Officer (TPO) scrutinised the details of reimbursements while examining the international transaction of reimbursement by TIL to the assessee under Section 92 of the Act and found that the assessee made no profit on such reimbursements and that the reimbursements were at Arm s Length. Thus, the finding having been rendered after thorough examination of the factual position as well as the terms and conditions of the agreement qua Article 12(4)(b) of the Indo-US Treaty, we find no ground to take a different view. Consequently, the substantial question of law nos.(c) and (d) are also answered against the revenue. - ITAT/79/2022 IA No.GA/2/2022 - - - Dated:- 4-1-2023 - HON BLE JUSTICE T.S. SIVAGNANAM AND HON BLE JUSTICE HIRANMAY BHATTACHARYYA Appearance : Mr. Tilak Mitra, Adv. Mr. Soumen Bhatttacharjee, Adv. for the appellant. Mr. J.P. Khaitan, Sr. Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue have raised four substantial questions of law, the same can be grouped into three categories. Question nos.(a) and (b) deal with the effect of the ruling rendered by the Authority of Advance Ruling (AAR). Question no.(c) deals with the services provided by the assessee to Timken India Limited (TIL) and substantial question of law no.(d) deals with the services provided by the third party. On the first two substantial questions of law, we find that the Tribunal had taken note of its earlier decisions for the assessment years 2002-03 to 2007-08 and dismissed the appeal filed by the revenue upholding the order passed by the Commissioner of Income Tax (Appeals)-22, Kolkata dated 28 th March, 2018. Though the revenue had preferred appeals as against the said order passed by the Tribunal for the assessment years 2002-03 to 2007-08, those appeals were withdrawn on the ground of low tax effect. Therefore, we are required to consider as to whether the factual finding rendered by the Tribunal is just and proper and, whether the provisions of Article 12 of the Indo-US Treaty was properly interpreted in the facts and circumstances of the case. The assessee entered into an agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement is purely advisory services and such advisory services cannot be treated as fees for included services under Article 12(4)(b) of the Indo-US Treaty since there is no technology which is made available. The Tribunal upon reconsideration of the factual position found that the clauses in the agreement would clearly show that the nature of services is advisory in nature and nothing has been made available to TIL by the assessee. After referring to Example no.7 given in the MoU between India and US on DTAA it was held that consideration for advisory services rendered cannot be treated as fees for included services under Article 12(4)(b) of the Treaty. That apart it is not in dispute that the assessee does not have any permanent establishment in India and, income so arising to them in India cannot be taxed under Article 7 as business profits either. The assessee and the TIL had filed a writ petition before this Court challenging the vires of Section 44D(b) of the Act. The Hon ble Court while framing the issue for consideration by its judgment reported in (2016) 4 TMI 592 Cal held that the issue pertains to machinery of presumptive tax provided for in the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on being unreasonable or ultra vires the Constitution. The above decision has attained finality as the revenue had not carried the matter in appeal. This aspect was also noted by the learned Tribunal but in its view, as having come to a factual conclusion that the assessee is rendering only advisory service and it cannot be treated as included services under Article 12(4)(b) and held that the contention of the assessee with regard to the binding nature of the ruling of the AAR has become academic. In our considered view, the agreement between the parties had been properly interpreted by the CIT(A) and on re-examination, the Tribunal also concurred with the CIT(A). Thus, we find no different view is possible than the interpretation given by the CIT(A) as approved by the Tribunal. Therefore, the order passed by the learned Tribunal is affirmed on this aspect and, accordingly, substantial questions of law nos.(a) and (b)are answered against the revenue. With regard to the substantial questions of law nos.(c) and (d) are concerned, the only difference being that one of the questions pertains to services rendered by the assessee and the other is service rendered by thir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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