TMI Blog2023 (5) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... legal advisory, wherein it cannot be said that any technical knowledge, experience, skill, know-how, or processes can be utilised by the client in the future without the aid of the assessee, therefore, the services rendered by the assessee cannot be said to have made available the technical knowledge, skill, experience, know-how or process, etc. to the recipient of services. Thus, respectfully following the decision of the coordinate bench of the Tribunal rendered in assessee s own case [ 2017 (2) TMI 779 - ITAT MUMBAI] we are of the considered view that income received by the assessee is not in the nature of Fees for Technical Services as envisaged under Article 13 of the India-UK DTAA. As a result, grounds raised in assessee s appeal are allowed. Existence of the Permanent Establishment ( PE ) in India in terms of the provisions of the India-UK DTAA - HELD THAT:- From the perusal of the submission dated 02/12/2016 filed by the assessee before the AO, forming part of the paper book from pages 9-22, we find that employees of the assessee were present in India for rendering services for a period aggregating to only 13 days. This fact was also reiterated by the assessee be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directions of the Dispute Resolution Panel (DRP ) on the following grounds: 1. The learned AO/DRP erred in computing the total income of the appellant at Rs. 47.77,691. 2. The appellant submits that the learned DRP erred in arriving at various unwarranted and erroneous discussions and conclusions which has not been subject matter of the draft assessment order dated December 31, 2016 passed under section 143(3) r.ws 144C. Permanent Establishment 3. The DRP erred in holding at para 2.6 that the appellant has a permanent establishment in India which is contrary to the fact that the number of days furnishing of services in India during the previous year relevant to the assessment year 2014-15 did not exceed 90 days. 4. The learned AO/DRP therefore ought to have held that, in absence of permanent establishment in India no part of its fees is liable to tax in India. 5. The learned AO/DRP erred in not following the decision of the Mumbai Tribunal in the appellant's own case for the assessment year 2011-12. 6. Without prejudice the learned AO ought to have appreciated that the income earned by the appellant is covered by the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e arising in grounds no.7-9, raised in assessee s appeal, is pertaining to the denial of benefit of the India-UK Double Taxation Avoidance Agreement ( DTAA ). Since the adjudication of this issue is necessary for other issues raised in this appeal, therefore, the same is taken up first. 5. The brief facts of the case as emanating from the record are: The assessee is a Limited Liability Partnership, which is incorporated and registered with the Registrar of Companies for England and Wales under the Limited Liability Partnership Act 2000 of the United Kingdom ( UK ). The assessee is engaged in providing legal services to its clients. For the year under consideration, the assessee filed its return of income on 23/09/2014 as non-resident assessee declaring a total income of Rs. Nil. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) were issued and served on the assessee. During the assessment proceedings, it was noticed that the assessee has been held not to be a resident in the UK for the purpose of the India-UK DTAA, as per Tax Residency Certificate issued by HMRC. The Assessing Officer ( AO ) vide draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Counsel, appearing for the assessee, submitted that this issue is covered in favour of the assessee by decisions of the coordinate bench of the Tribunal in assessee s own case for the preceding as well as the subsequent assessment years. 7. On the contrary, the learned Departmental Representative ( learned DR ) by vehemently relying upon the orders passed by the lower authorities submitted that as per the Tax Residency Certificate issued by HMRC, the assessee has been held to be not a resident for the purpose of the India-UK DTAA. The learned DR also submitted that the assessee did not produce copy of the Limited Liability Partnership deed so as to know the members before any of the lower authorities. 8. In his rebuttal, the learned Sr. Counsel though agreed that the copy of the Limited Liability Partnership deed was not submitted by the assessee, however, submitted that the assessee furnished the list of the members as on 31/03/2014 before the AO vide its submission dated 29/12/2016. 9. We have considered the rival submissions and perused the material available on record. As per the assessee, it is liable to the UK tax system in view of its incorporation in the UK. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UK- DTAA. Therefore, Grounds 8 to 8.4 are allowed. 9. Thus, in view of the aforesaid decision of the Co ordinate Bench in assessee s own case, we hold that the assessee is entitled to claim benefit under India UK DTAA. 10. We find that the coordinate bench of the Tribunal in assessee s own case in Linklaters LLP vs DCIT, in ITA No. 969/Mum./2017, for the assessment year 2013-14, vide order dated 21/06/2019 rendered similar findings. Similarly was held by the coordinate bench of the Tribunal in assessment years 2015-16 and 2016-17 in assessee s own case in ITA No. 6846/Mum./2018 and ITA No. 1256/Mum./2021 vide orders dated 12/06/2020 and 22/02/2023, respectively. 11. The learned DR could not show us any reason to deviate from the aforesaid decisions rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment year. The issue arising in the present appeal is recurring in nature and has been decided by the coordinate bench of the Tribunal in the preceding assessment years. Thus, respectfully following the orders passed by the coordinate bench of the Tribunal in assessee s own case cited supra, we uphold the plea of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r technology or techniques in future without depending upon the service provider. We have analysed various services provided by the assessee to its clients on the basis of details brought before us. Our attention was drawn on various types of services provided to its clients by the assessee which have been tabulated before us in following manner:- I. Documentation services provided to non-Indian clients in relation to fund raising/lending activities of non-Indian parties for London listing of non-Indian entity Financial transaction in international markets-loan documentation Issuance of debt securities by non-Indian party-documents relating to issuance of subscription agreements, trust deed, agency agreement, set of terms and condition, prospectus. Drafting preliminary and other documentation for an Initial public officering and listing in Singapore by non-Indian entity. Voluntary cash general offer of a public listed company in Singapore Exchange II. Advising on foreign laws and other non-Indian matters to non-Indian clients, viz. On EU Law to Geneva based company US based corporate in relation to complain submitted to European Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign clients also. It was noted by us that in all the cases, services provided were of the nature of advisory or due diligence for different kind of projects. 30. As per our understanding, for none of these services it can be said that technical knowledge, skill, experience, know-how or process remained with the clients to whom services were rendered by the assessee, even after the rendition of services was completed and agreement came to an end. These services were of purely legal advisory nature; it cannot be said that recipient of the services was in a position to duplicate similar skill or technology or techniques in future without the aid or assistance of the assessee for carrying out similar assignments. These services have been indeed used by the clients for their benefit but the re-application or repetition of the same benefit for future requirements of these clients without involvement of the assessee was not committed by the assessee, as per the facts brought before us. Thus, it cannot be said that by way of rendition of these services, the assessee 'made available' to its clients the technical knowledge, skill, experience, know-how or process, etc. 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of the Permanent Establishment ( PE ) of the assessee in India in terms of the provisions of the India-UK DTAA. 17. It is evident from the record that the AO vide draft assessment order did not go into the aspect of the existence of PE, since the assessee was at the outset denied the benefit of the India-UK DTAA. We find that the learned DRP in assessee s own case for preceding assessment years has held the assessee to have a PE in India, which directions were followed by the learned DRP in the year under consideration. During the hearing, the learned Sr. Counsel submitted that there are no express findings, in this year, regarding the provision under which the PE is constituted. It was further submitted that the assessee cannot be said to be taxable under the provisions of Article 5 r/w Article 7 of the India-UK DTAA, since the assessee neither has a fixed place of business in India nor any of its employees stayed in India for more than 90 days. 18. We have considered the rival submissions and perused the material available on record. We have already come to the conclusion that the fee received by the assessee is not in the nature of Fees for Technical Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee before the learned DRP. However, the same has not been controverted. Even in the final assessment order pursuant to the directions issued by the learned DRP, the AO has not denied the aforesaid fact. Therefore, in view of the aforesaid uncontroverted factual position, we are of the considered opinion that the assessee does not have a PE in India under the provision of the India-UK DTAA, during the year under consideration. Since the assessee neither has a PE in India nor the income is found to be in the nature of Fee for Technical Services under the provisions of the DTAA, therefore, the said income cannot be brought to tax in India, even under the provisions of the Act in view of the provision section 90(2) of the Act. As a result, grounds no.3-5 raised in assessee s appeal are allowed. 20. In view of the aforesaid findings, ground no.6 is rendered academic and therefore is left open. 21. The issue arising in ground no.12-13, raised in assessee s appeal, is pertaining to the taxability of reimbursement of expenses received by the assessee. 22. We have considered the rival submissions and perused the material available on record. As per the assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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