TMI Blog2023 (10) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient was enabled to derive benefit of enduring nature from receipt of these services thus satisfying the 'make available clause. Assessee is a company incorporated under the laws of Singapore and is engaged in the business of providing transportation, logistics and supply chain solutions. The principle activities of the assessee are in the nature of management and support activities to its subsidiaries and related corporation in the Asia Pacific region - HELD THAT:- Since in the instant case, the training was for intimating the employees employed by India affiliate regarding the standard steps to be followed in executing an order / trade / business. This improves customer satisfaction and helps in reducing overall cost for the Indian affiliate / organization. 25. We observe that training per se, would not result in make available of technology, experience, skill processes, etc., unless the training involves the transfer of technology, processes, skills, etc., to the recipient in a manner which enables the recipient to apply the technology and to derive benefit therefrom without recourse to the tutor, it would not fall within the expression technical services a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in giving relief of an amount of Rs. 4,44,37,942/- out of total addition of Rs. 6,72,88,703/- made by the AO on account of Fee for Technical Services [FTS] holding that services of the nature of Management Support, treasury Support, Legal Support, Information Communication and Human Resources are not of the nature of FTS as make available clause is not satisfied in case of these services disregarding the facts that the employee of the assessee visited India in connection with rendering of these services and the recipient was enabled to derive benefit of enduring nature from receipt of these services thus satisfying the 'make available clause. 3. Brief facts are that the assessee is a company incorporated under the laws of Singapore and is engaged in the business of providing transportation, logistics and supply chain solutions. The principle activities of the assessee are in the nature of management and support activities to its subsidiaries and related corporation in the Asia Pacific region. During the year under consideration, the assessee has received the following revenue from India: - 1. Management fee Rs. 6,72,88,730/- 2. Software license fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch enabled them to apply that knowledge and technology to their own business fall within the purview of FTS u/s 9(1)(vii) of the Act as well as under the Indo Singapore DTAA. Accordingly, the management fee of Rs. 67,88,703/- received by the assessee was treated as FTS and brought to tax @10% as per Indo Singapore DTAA. 5. On appeal, the Ld.CIT(A) in so far as the Management Support Services and Management Support, Finance and Treasury functions, Information Technology Support, Human Resources and Administrative Support and Legal Support are concerned held that these services do not satisfy the make available clause as mentioned in Clause (4) of Article 12 of the Indo Singapore DTAA and, therefore, held that the same are not chargeable to tax as Fees for Technical Services. However, coming to the Marketing and Sales Operations and Standardization are concerned, the Ld.CIT(A) held that the receipts for these services attract make available clause as per Article 12(4) of Indo Singapore DTAA and, therefore, they are liable to tax under FTS. 6. The Ld. DR submits that analysis of the services rendered by the assessee to its group entities through Administrative Support Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provide sales training to local business development employees; Coordinate customer bidding and pricing process; Create advertising brochures, newsletters, and sales sheets; Develop and place marketing and promotional materials. The appellant provides training to the business development employees as regards product types, product mix, product features offered by CEVA group, market positioning of the group, credit policies, CEVA vision, parameters of customer satisfaction, anti-bribery legislation, service level quality standards, targets, approval process, information security, data protection, confidentiality etc. m place so that they know what is expected by CEVA group and its clients. It is submitted that these activities by the appellant does not create/ build any capacity and consists of merely informing the employees regarding the organization and its policies so that they get acquainted with the work culture and know clear expectations of the group. This cannot be regarded as training per-se but a kind of induction familiarization to understand the expectations of the group. Therefore, the consideration relatable to the above cannot be chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the services expected out of them. At the cost of repetition, it is submitted that the employees of India affiliate are given acquainted with anti-bribery legislations of the UK, data protection laws etc. of the EU so as to comply with the international obligations of the group (as it operates worldwide and these regulations apply to Indian employees also). These trainings cannot, by any stretch of imagination, equip India affiliate to perform the marketing services on their own and hence the provisions of Article 12(4) are not attracted on facts of the case. Operation and Standardization The broad category of services as per the agreement is as follows: Regional training, assistance, and management of LEAN initiatives; Advice on standardization of warehouse designs; Implement and train employees on standard logistics operating processes; Develop standard solution sets and evaluate regional best practices; Maintenance of security manuals and training of security managers. If is submitted that, the appellant is involved in providing training for intimating the employees employed by India affiliate regarding the standard steps to be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall within the expression technical services as defined in the Treaty . Such trainings do not make available' technical knowledge, experience, skill, know-how or processes. There was no transfer of technology. It merely facilitated the employees of the appellant to work in accordance with the expected standards. Thus, the training did not make available any technical knowledge, experience, skill, know-how or processes. 8. Heard rival submissions, perused the orders of the authorities below. We observe that the Assessing Officer treated the management fee received by the assessee under administrative support agreement as fee for technical services read with article 12(4) of Indo Singapore DTAA. The Ld.CIT(Appeals) on examining the e-mails, the correspondence between the assessee and its group entity in India concluded that in so far as the following services the make available clause as per clause IV of article 12 of DTAA is not satisfied and, therefore, they are not liable to tax as FTS: 1. Management Support; 2. Finance Treasury functions; 3. Information Technology Support; 4. Human Resources and Administrative Support; and 5. Legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; the technical knowledge and experience of the applicant to the recipient; There is no transfer of technical know-how nor can it be said that the recipient has been enabled to apply the technology which is possessed by the applicant. 6.4 The appellant submitted seven e-mails on sample basis to demonstrate the nature of services provided under the head Management Support Services . The same are discussed as under:- Date of e-mail: March 28, 2018 6.5 This e-mail is exchanged between the CEO office to the locally operating entities / AP team wherein it was intimated to the group entities that CEVA has been nominated to handle freight for PANASONIC LCL. The summary of the award which has been awarded to CEVA is as follows: Ocean Import - All USA Ocean Export - China India Volume: 80-90 Shipments per year. Date of e-mail: Februaryl4, 2018 6.6 This e-mail is exchanged between the CEO office to the locally operating entities / AP team wherein the CEO office has intimated to the group entities that CEVA has been awarded some freight lanes by ANSELL. In connection with India affiliate, ANSELL has awarded the following lanes: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nominated to handle freight for PHILIPS' Air freight business. Following business was awarded to the CEVA group: Date of e-mail: March 22, 2018 6.10 This e-mail chain is exchanged between the CEO office to the locally operating entities / AP team wherein the CEO office has intimated to the group entities that CEVA has been nominated to handle freight for TOSHIBA Air freight business. The summary of award is as follows: SUMMARY of AWARD Air: We grew by +3% (93.6 tons) over our existing business Date of e-mail: March 22, 2018 6.11 This e-mail chain is exchanged between the CEO office to the locally operating entities / AP team wherein the CEO office has intimated to the group entities that CEVA has been nominated to handle freight for VISTEON Air and Ocean Freight Contract Logistics. 6.12 From the emails as discussed above, it transpires that the CEO Office is involved in acquiring new customers as per the business strategy and these contracts have been awarded to the group entities due to the efforts of CEO/CFO/Regional President of APAC region along with business development team. I find that effectively, in this case, the India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Financial reporting; Financial system and development; Financial audits for Asia Pacific entities; Quarterly forecasts for Asia Pacific entities; Company policies, business rules and compliance; and Annual budget implementation. Management accounting The Management Accounting group's primary roles and responsibilities are: Management reporting for Asia Pacific divisions including India; Job costing; Business analysis, including competitors analysis, strategic finance proposals, and gathering market intelligence for the Asia Pacific divisions; Product and customer profitability analysis; Intercompany policies implementation and compliance; Review and approve capital investments; and Budgeting and forecasting for local CEVA entities in the Asia Pacific region. Tax The Tax group's primary roles and responsibilities are: Tax planning and compliance; Management of relationships with external tax advisers; Tax restructuring across Asia Pacific where required; Budgeting and forecasting of cash taxes Treasury The Treasury group's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handout appended with the e-mail provides guidelines for the purposes of performing the monthly tasks. Date of e-mail: January 22. 2013 (refer serial no. 8 of submission dated November 6, 2017 and page 71 of the paper book) 7.7 Based on the data input by India affiliate, the appellant prepares one off summary of major items affecting the business processes of the Indian entity in the template provided by the appellant. Date of e-mail: January 18, 2013 (refer serial no. 9 of submission dated November 6, 2017 and page 74 of the paper book) 7.8 Based on the data input by India affiliate related to revenue forecasts, the appellant analyses the same and shares the significant variance with the respective management team of the affiliates falling within the Asia Pacific Region. These variances are then discussed with regard to the reasons attributable to the same, the main cause of concerns and the way in which the entities (including India affiliate) is managing those variances and the corrective action required to address the issues / variances. Date of e-mail: July 29, 2013 (refer serial no. 10 of submission dated November 6, 2017 and page 93 of the paperbook ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch services, CEVA entities including CEVA India receive a number of benefits from the intra-group finance services provided. 7.13 As pointed out by the appellant, financial services involve various activities such as (a) analysis of data, (b) audit, (c) forecasting analysis, (d) relationship with tax advisors and banks, (e) tax advice, (f) cash management and (g) loan portfolio management. In all such services, the recipient is provided with the decision taken by the experts at the appellant level. There is no involvement of the local entities in the decision making. 7.14 Furthermore, the entities benefit from economies of scale through the centralization of these strategic activities/ decision making. In the absence of regional finance function, each CEVA entity in Asia Pacific region would either have to expand its local finance resources and capabilities, or outsource the function to third party service providers. Hence, by centralizing the functions, each CEVA entity benefits from the reduced costs that are realized through economies of scale and increased specialization. I find that in this case, the services involve decision making on behalf of the group entities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate with the appellant for its comments / suggestions. In the above process, only the report/ advice / reviewed version of agreement of the in- house counsel of the appellant is provided to India affiliate / vendor, therefore there is no question of technical knowledge etc. being 'made available' by the appellant to the India affiliate. The intellectual property rights are protected by obtaining applicable registrations by the group. This is further strengthened by constant vigilance being exercised by the appellant by finding out possible cases of IPR infringement. There is no scope of imparting of any technical knowledge, know-how etc in this case. The industry in which CEVA operates is subject to antitrust/ competition regulations. The legal department advises on the appropriate legal advice in respect of any regional matters relating to antitrust/ competition regulations, queries and litigation and co-ordinates and manages outside counsel in this regard. The appellant department has 4 employees engaged in the provision of legal services in the Asia Pacific region. There is only one legal counsel each in the local affiliates in Australia, China and India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ensures alignment with global policies of the group. Date of e-mail: 11th July 8.7 This correspondence involves review of lease deed / tenancy agreement by the legal team of the appellant from legal and general standpoint and the suggestions are then sent to the India affiliate post review. Date of e-mail: 23rd and 25th July 8.8 This correspondence involves review of photocopier agreement by the legal team of the appellant from legal and general standpoint and the suggestions are then sent to the India affiliate post review. Date of e-mail: 14th September 8.9 This communication pertains to negotiating a bulk deal with a hotel chain for the entire group (within Asia Pacific) and thus ensures achievement of economies of scale for the group as a whole. The appellant requests the group companies including the India affiliate to review the list of hotels under the group, and respond with their requirements as regards preferred location, average number of rooms required etc. This would ensure formulation of group policy and shall result in economies of scale for the India affiliate / group as a whole. 8.10 I find that the set of functions performed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (D) INFORMATION TECHNOLOGY SUPPORT (ICS) 9.1 The services as per the agreement include: Provision of hardware, software, and desktop support services Software programming and development Data communication support and monitoring of signal transmissions Maintenance of program databases. 9.2 The appellant explained the nature of Information Technology Support services which is reproduced as under:- This includes General IT services in the nature of: Provision of desktop support; Provision of hardware and software support; Update and maintenance of software programs and scheduling databases; Monitoring of servers, systems and networks, providing availability reporting and first-hand insight for both internal and external issues; Maintaining and supporting internal non-customer facing operations, such as the internal emailing system, active directory, file shares and backup; Development and monitoring of standard guidelines for servers, PCs, change management, incident management, project management, procurement and document management; and Maintaining vendor relationships. 9.3 The D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice provider is not imparting the technology/ know-how utilized in rendering such services. As a result of all such services, the recipient has received only the software applications having graphical user interface for performance of its day to day activities. The database and program code is like a black box for the recipient as he can only use various features of software applications by entering input parameters on computer screen without knowing anything about the program code/ database code behind it. In such a situation, it is not a case of make available of information technology services. (E) MARKETING AND SALES SERVICES 10.1 These services as per the agreement are in the nature of the following: Provide sales training to local business development employees Coordinate customer bidding and pricing process Create advertising brochures, newsletters, and sales sheets Develop and place marketing and promotional materials 10.2 The appellant explained the nature of Marketing and Sales services which are reproduced as under:- The appellant provides training to the business development employees as regards the product types / featur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion regarding involved lanes and volumes are based on the same RFQ done last year. RFQs without volume information are not (yet) included in this overview. 10.5 It involves creation of data by the appellant which can be used by the affiliates (including India affiliate) to better understand and analyze prepare proper quotation with regard to pricing and volume information. 10.6 I find that the appellant has admitted the fact of providing a) training to the business development employees of Indian entity and other group entities regarding the product types / features offered by CEVA group, market positioning of the group, credit policies, CEVA vision, parameters of customer satisfaction, service level quality standards, targets, approval process etc. and b) support to the India affiliate with customer bidding and pricing process. 10.7 The appellant submitted that the purpose behind providing such services is to equip the business development team at local level to know what is expected by CEVA group and its clients. The appellant further submitted that in the absence of the support provided by the department, CEVA affiliates would lag behind their competitors (such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the technology/know-how. 10.12 I find that the Indian entity is operating in supply chain management domain. Since the Indian entity is engaged in logistics domain, therefore, any detailed inputs and training for on boarding of clients clearly impart the knowledge because the recipient of knowledge in turn has used the same in providing services to its clients without going back to the appellant company. This position has been fortified by the decision of Hon'ble ITAT, Chennai in the case of Foster Wheeler France S.A wherein it is held that providing the best practices available in the form of written procedures and specifications and details to the recipient which is also a specialized company in the same domain, it is a case of making available specifications and details. The recipient can very well use the same for execution of other projects also. HUMAN RESOURCES AND ADMINISTRATIVE SUPPORT 11.1 These services as per the agreement are in the nature of the following: Regional management and coordinate of HR policies Advise on compensation and benefits benchmarking Monitoring and support of local labor requirements Coordinate annua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motion data and salary numbers populated in the template was a subject matter of discussion in the conference call with reference to various grades / levels. This formed part of support with regard to yearly appraisals and yearly salary salary review and is akin to outsourcing a particular function to a third party. The deliverable in this case is in the form of a report which provides for revised salary numbers after the yearly appraisals. Date of e-mail: April 5, 2018 11.5 This e-mail involves sharing of template by regional HR to the India affiliate. This template confirm to the allowances provided in the countries. The said exercise ensures that CEVA has an accurate inventory, common definitions where possible, and understand how to best configure HR software to hold these values. This is akin to consolidation of data and ensuring that the reasons of providing different allowances / components to the employees of India affiliate is correctly captured centrally within a software system so that a better / informed decision is taken with regard to compensation package is offered to the employees or revised. This ensures uniformity or streamlines the HR process across the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of resources and capabilities). 11.10 It may be relevant to make reference of one of the examples of India USA MOU which reads as under: Example 7 Facts: The Indian vegetable oil manufacturing firm has mastered the science of producing cholesterol-free oil and wishes to market the product IT A No.1150/Ahd/2007 Shell International B.V. Netherland Vs. ITO A.Y. 2003-04 worldwide. It hires an American marketing consulting firm to do a computer simulation of the world market for such oil and to advise it on marketing strategies. Are the fees paid to the U.S. Company for included services? Analysis: The fees would not be for included services. The American company is providing a consultancy service which involves the use of substantial technical skill and expertise. It is not, however, making available to the Indian company any technical experience, knowledge or skill, etc., nor is it transferring a technical plan or design. What is transferred to the Indian company through the service contract is commercial information. The fact that technical skills were required by the performer of the service in order to perform the commercial information service does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o equip him to independently perform the technical function himself in future, without the help of the service provider. G Operations and Standardization 12.1 The broad category of services as per the agreement is as follows: Regional training, assistance, and management of LEAN initiatives Advice on standardization of warehouse designs Implement and train employees on standard logistics operating processes Develop standard solution sets and evaluate regional best practices Maintenance of security manuals and training of security managers 12.2 The appellant explained the nature of Operations Standardization services which is reproduced as under:- It is submitted that, the appellant is involved in providing for intimating the employees employed by India affiliate regarding the standard steps to be followed in executing an order / trade / business. This improves customer satisfaction and helps in reducing overall cost for the Indian affiliate / organization. It is submitted that these activities by the appellant does not create/ build any capacity and consists of merely informing the employees regarding the organization and its po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing functions: Implementation of best practices Actual implementation of contracts, agreements etc 12.5 The appellant submitted e-mails on sample basis to demonstrate the nature of services provided under the head Operations and Standardization . The same are discussed as under:- Date of Communication: February 1, 2017 (refer serial no. 1 of submission dated November 6. 2017)-Tender Review Board, Air Ocean 12.6 This documents updates the processes contained within the Rules of Engagement for the Tender Review Board (TRB), these changes will increase efficiency in the bidding process. As per the appellant, the purpose of the updated Rules of Engagement is to support BD in winning and retaining business by having a single, consistent, aligned and representative forum that can fast-track and control decisions on a bid which ultimately supports the strategic goals for growth and profitability. The appellant pointed out that the purpose of this document is to describe the responsibilities, for Freight Management bids, between Business Development, the Business Lines and Global Tender Management and the objective is to strengthen and ensure a seamless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entities falling within the group. 12.10 In the backdrop of the facts discussed above, I find that the services in relation to OPERATIONS AND STANDARDIZATION have been found to include training of Indian entity resources by the Regional Head (appellant) regarding standard operating processes , new initiatives and security . The appellant submitted three emails to demonstrate the nature of services on sample basis in this regard. First email is regarding update in respect of processes contained within rules of engagement for the tender review board. This email highlights the fact of sharing of written detailed out procedures/ processes to the group entities so as to ensure uniformity in operations across globe. Second email is regarding a report of compliance tools which measures the variation in compliance with reference to the process requirements and system requirements. This email highlights that the appellant is not only making available the specifications and other procedures but also is reviewing and tracking the actual performance vis a vis the given set of specifications, it is a case of making available its technical knowledge, expertise, knowhow in execution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and specifications clearly impart the knowledge in respect of processes and specifications. The recipient in turn has used the same in providing logistics services to its clients without going back to the appellant company. This position has been fortified by the decision of Hon'ble ITAT, Chennai in the case of Foster Wheeler France S.A wherein it is held that providing the best practices available in the form of written procedures and specifications and details to the recipient which is also a specialized company in the same domain, it is a case of making available specifications and details. The recipient can very well use the same for execution of other projects also. TO SUM UP: 13.1 To sum up, I find that the services performed in this case can be broadly divided into two categories a) where the services pertain to the principal activity of the business run by the group entities (Operations standardization, Marketing activities, Management Support Services) and b) where the services do not pertain to principal activity of the business such as administrative, financial, legal and HR services. The basic difference in two categories is that the resources engag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable the knowledge, experience or know how to the Indian affiliate. a) decision of the Hon'ble ITAT, Bangalore Bench in the case of Bovis Land Lease (India) Pvt. Ltd wherein the Tribunal held as under: In respect of assistance in the operation of the business, it has been made clear that LLAH will provide education and training material for the staff of the appellant company on or off-shore. In respect of majority of services, it has been mentioned that it will provide assistance. Thus, LLAH is providing assistance for various services and as per the agreement, it has to provide the education and training to the employees of the appellant company. The word make available only refers to the 'willingness' of the [provider of services and does not refer the acceptance of the receiver of the services . 13.5 The above case of Bovis Land Lease does include the facet of training and education to the employees of the appellant company in respect of various services. Accordingly, this case law has been applied only for such services where training has been imparted as per the agreement. However, the AO has applied it to all types of services without appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations standardization and Marketing activities services performed in this case as fee for technical services. As regards other services, since the make available feature is not present in delivery of services, accordingly, the same are held to be not chargeable to tax as fee for technical services. 9. In so far as the management support services, finance and treasury support, legal support, information technology support, human resources and administrative support are concerned, we agree with the findings of the Ld.CIT(A) that these services do not fall under FTS and none of the services satisfied the make available clause as per article 12(4) of Indo Singapore Treaty. 10. We further find that the Ld.CIT(A) in so far as the services i.e. marketing and sales services are concerned after examining the emails/ correspondence between the assessee and the Indian entity observed that assessee is providing training to the business development employees of the Indian entity and other group entities regarding product types/features offered by Sewa Group, market positioning of the group, credit policies, Sewa vision, parameters of customers satisfaction, service level qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oordinate customer bidding and pricing process; Create advertising brochures, newsletters, and sales sheets; Develop and place marketing and promotional materials. 13. The appellant provides training to the business development employees as regards product types, product mix, product features offered by CEVA group, market positioning of the group, credit policies, CEVA vision, parameters of customer satisfaction, antibribery legislation, service level quality standards, targets, approval process, information security, data protection, confidentiality etc. m place so that they know what is expected by CEVA group and its clients. It is submitted that these activities by the appellant does not create/ build any capacity and consists of merely informing the employees regarding the organization and its policies so that they get acquainted with the work culture and know clear expectations of the group. This cannot be regarded as training per-se but a kind of induction familiarization to understand the expectations of the group. Therefore, the consideration relatable to the above cannot be characterized as FTS under Article 12(4) of India-Singapore tax treaty. 14. We obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations of the UK, data protection laws etc. of the EU so as to comply with the international obligations of the group (as it operates worldwide and these regulations apply to Indian employees also). These trainings cannot, by any stretch of imagination, equip India affiliate to perform the transacted services on their own and hence the provisions of Article 12(4) are not attracted on facts of the case. Operation and Standardization 19. The broad category of services as per the agreement is as follows: Regional training, assistance, and management of LEAN initiatives; Advice on standardization of warehouse designs; Implement and train employees on standard logistics operating processes; Develop standard solution sets and evaluate regional best practices; Maintenance of security manuals and training of security managers. 20. We observe that, the appellant is involved in providing training for intimating the employees employed by India affiliate regarding the standard steps to be followed in executing an order/ trade / business. This improves customer satisfaction and helps in reducing overall cost for the Indian affiliate/ organization. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow or processes. There was no transfer of technology. It merely facilitated the employees of the appellant to work in accordance with the expected standards. Thus, the training did not make available any technical knowledge, experience, skill, know-how or processes. 26. In the case of Exxon Mobil Company India Pvt. Ltd. Vs. Addl. CIT [92 taxmann.com 5] (Mum.) considered the payment made by assessee to Singapore based Company for providing legal support services including management consulting functional advise, administrative, technical, professional and other support services and held that since foreign company had not made available any technical knowledge, expertise, skill, knowhow or process which enabled assessee to apply technology contained therein on its own payment made by assessee could not be considered as fees for technical services as defined under article 12(4)(b) of Indo Singapore DTAA while holding so the Tribunal considering the decision of the Karnataka High Court in the case of Bears India Mineral Pvt. Ltd. held as under: 48. We have heard rival contentions and perused material on record. We have also applied our mind to the decisions relied upon. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service recipient is necessary. Some sort of durability or permanency of the result of the rendering of services is envisaged which will remain at the disposal of the service recipient. In other words, the technical knowledge, experience, skill, etc., must remain with the service recipient even after the rendering of the services has come to an end. In contrast to Article-12(4)(b) of India- U.S. tax treaty, Article-12(4)(b) of India-Singapore tax treaty has made it more specific by providing that technical knowledge, experience, skill, knowhow or process, would not amount to fees for technical service unless it enables the person acquiring the service to apply the technology therein. A perusal of the agreement between the assessee and EMCAP makes it clear that as per the terms of the agreement EMCAP would provide management consulting, functional advice, administrative, technical, professional and other support services to the assessee either itself or through any affiliate or through third parties. However, there is nothing in the agreement to conclude that in the course of such provision of service, EMCAP has made available any technical knowledge experience, skill, knowhow, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowhow, etc., must remain with the recipient even after the contract comes to an end. The Court has observed, the technology will be considered to have been made available when the person acquiring the service enable him to apply the technology. Further, the Court went on to hold that the payment can be considered as fees for technical services only if the twin test of rendering service and making technical knowledge available at the same time is satisfied. If we apply the aforesaid tests laid down by the Hon'ble Karnataka High Court to the facts of the present case it becomes clear that it has not been established on record that while rendering the services, EMCAP has made available technical knowledge, knowhow, skill, etc., to the assessee in a manner to enable him to apply them independently or on its own. Therefore, the payment made by the assessee cannot be considered as fees for technical services as defined under Article 12(4)(b) of the India-Singapore tax treaty and for this reason also we do not have to examine taxability of the same under section 9(1)(vii) of the Act. Moreover, it is a fact on record that the payment of global support service fee was made under the ..... 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