9911796707
TMI Blog2024 (12) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax, Circle Int. Tax 2(1)(1) [hereinafter referred as ('Ld. AO')] in pursuance to the direction of learned Dispute Resolution Panel-1, New Delhi dated 19.09.2023 under section 144C(5) of the Act for the Assessment Year 2021-22. 2. Brief facts of the case are that the assessee/appellant is engaged in the business of sale of motorcycles and related parts, accessories, and general merchandise and also engaged in resale of merchandise bearing the Harley Davidson Brand name. The assessee electronically filed its return of income for the A.Y. 2021- 22 declaring total income of Rs. 2,85,38,016/- on 15.03.2022. The case was selected for scrutiny under CASS. Notice under section 143(2) of the Act was issued on 29.06.2021 and duly served u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 144C of the Act was forwarded to the assessee. Against the draft assessment order, assessee filed his objections in Form 35A before Dispute Resolution Panel-1, Delhi ('DRP-1') on 25.01.2023 under section 144C(2)(b) of the Act. Hon'ble DRP vide order dated 19.09.2023 issued directions under section 144C(5) of the Act. In compliance of directions, assessment order dated 31.10.2023 under section 143(3) read with section 144C(13) was passed. 4. Being aggrieved by the assessment order, assessee/appellant preferred appeal. 5. Learned Authorized Representative for the assessee/appellant submitted that learned DRP and learned AO erred in concluding that the receipts amounting to Rs. 14,33,10,396/- accruing to the Appellant on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance : Rs.2,27,88,766/- B. Maintenance and development (Software and hardware) : Rs.3,95,03,304/- C. Salary & Overheads i.e., Corporate allocation : Rs.3,84,98,865/- D. Depreciation of assets used in Providing GIS services : Rs.4,25,19,461/- 5.3 The cross-charging mechanism of the aforesaid services has been referred in the Clause 1 of the GIS agreement. The learned AO alleged that the impugned reimbursements are in the nature of FTS/FIS and satisfy the make-available clause. Even if the activities detailed in para 5 are assumed to be 'services' in nature, these do not satisfy the 'make available criteria and therefore cannot be taxed as FTS/FIS in view of the provisions of Article 12 of the India- USA-DTAA. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The copy of the MOU entered between India and USA is provided on page no. 279-305 of the Paper book. 5.5 In order to bring the impugned payments for services within the ambit of FTS/FIS under the India-US DTAA, the services would have to satisfy the 'make available' test meaning thereby that the services rendered must be such that the Indian AE i.e., HD India will be able to perform said activities in the future without any assistance from the Company which is not true in the present case, since the appellant is recovers GIS charges every year from the group affiliates which clearly shows that no enduring benefit is being provided. 5.6 Reliance is placed by the appellant on the order of Hon'ble ITAT Delhi in the case of GE E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 252 of the paper book does not mention details of services provided by Infosys. So, as per make available is to be taxed. The matter requires to be sent to the learned AO for re-appreciation of facts. 8. From examination of record in light of aforesaid rival contentions, it is crystal clear that learned DRP and learned AO concluded receipts accruing to the assessee/appellant on account of provision of GIS being services in the nature of general maintenance of software and hardware procured from 3rd party and other head thereof ('routine GIS services') to is affiliate in India are in the nature of Fees for Technical Services ('FTS') / Fees for Included Services ('FIS') under Article 12 of the India - US Double Taxation Avoidance Agreement ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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