TMI Blog2023 (3) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted. Since facts in the present case are identical to the aforesaid and no distinguishable feature has been pointed out, hence following the precedent we direct that the payment received in this case cannot be treated as FTS under Article 12 (5) of India Netherlands DTAA. Hence, this ground of assessee stands allowed. - ITA No.7963/Del./2019 ITA No.7964/Del./2019 ITA No.119/Del./2021 ITA No.822/Del./2022 - - - Dated:- 2-3-2023 - SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER And SHRI ANUBHAV SHARMA , JUDICIAL MEMBER For the Assessee : Shri K. M. Gupta, Advocate Shri Rishabh Malhotra , Advocate For the Revenue : Shri Mahesh Shah , CIT DR ORDER PER SHAMIM YAHYA , ACCOUNTANT MEMBER : These appeals by the assessee ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxed in India. It is prayed that the addition made by the Ld. AO should be deleted. Ground 3 Without prejudice to ground 1 and 2, on the facts and circumstances of the case and in law, the Ld. AO has erred in levying surcharge and education cess on income chargeable to tax under the tax treaty between India and Netherlands. It is prayed that the said levy by the Ld. AO should be deleted. Ground 4 On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 270(A) of the Act on the adjustment made in the final assessment order. 4. Although assessee has raised various grounds, ld. Counsel for the assessee stated that assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest. The amount received for business support services was not offered as income on the plea that it is in the nature of business profit and in absence of Permanent Establishment (PE) in India, it is not chargeable to tax. The AO was not convinced. After elaborate discussion, he concluded that the payment of Rs.11,85,39,571/- received by the assessee from foreign company on account of business support services is held to be taxable as FTS taxable @ 10% plus surcharge and education cess and added to the total income of the assessee. 8. DRP upon assessee s objections rejected the same. In this regard, emphasis was given on earlier direction issued by the DRP for Assessment Year 2014-15 and considering the background of the case, grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under Indian- Netherlands DTAA as they are in the active of management and consultancy services. Accordingly, he brought to tax the amount at the hands of the assessee. Against the draft assessment order, assessee raised objections before DRP. However, learned DRP rejected the objection. 6. Before us, learned counsel appearing for the assessee submitted that the services rendered are in the nature of managerial services and not technical or consultancy services. 7. Drawing our attention to Article-12(5) of Indian- Netherlands DTAA, learned counsel submitted, the definition of FTS does not include managerial services. Therefore, he submitted, it cannot be treated as FTS under the DTAA. 8. Without prejudice, he submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e managerial services within FTS. Therefore, the payment received by the assessee cannot be treated as FTS under India- Netherlands DTAA. Even, assuming for the sake of argument that payment received for certain kind of services is in the nature of FTS, however, the make available condition needs to be satisfied. Neither the Assessing Officer nor learned DRP have established on record that by rendering the services, the assessee has made available technical knowledge, know-how, skill etc. to the recipient of services, which would have enabled the recipient of such services to utilize it independently without the aid and assistance of the assessee. Thus, in our view, the make available condition is not satisfied. Therefore, the payment recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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