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TMI Blog2025 (4) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, eligible to claim benefits under the India-USA DTAA. The Assessee is engaged in the business of providing a range of application services to the global air transport sector, including Airport Systems Solutions ('Airport Services') and Passenger Systems Solutions ('Passenger Services'). The Assessee has earned income from licensing the use of its Airport Services software, which enables airlines and airports to use shared resources at airports to access their respective IT applications in real time for passenger check-in, bag drop and boarding. The Assessee has also earned income from services rendered to Indian airlines - mainly to National Aviation Company of India Limited [otherwise known as Air India Limited] - under its Passenger Services contracts. These services are provided from the Assessee's data centre in Atlanta, Georgia, USA, and comprise of automated passenger reservations, fares, ticket pricing, and related services. The Assessee does not have any place of business, office, or branch in India. The AO while completing the assessment under section 143(3) r.w.s.144C(3) of the Act treated the income arising out of both Airport Services and Passenger Services as taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line access to the service, remote access to the software is granted by the assessee. The services provided by the appellant as contained in Schedule 5A_1 of the agreement are in connection with the Core PSS and Related Applications, Frequent Flyer Program (FFP) and Internet Booking Engine (IBE). The assessee provides a full airline passenger reservation and departure control service comprising of the following elements: * Reservations * __________Fares &Pricing * Departure Control * Message Switching * Flight Information & Flight Tracking * Baggage Reconciliation * Internet Booking and * Frequent Flyer services 4. The main contention of the ld AR before us is that these services are standard services rendered using the software technology and that they are not the technical services. The ld AR argued that the Passenger Reservation System Services ("PSS") software of the Assessee is not made available to either NACIL or any of the other customers worldwide but is used by the Assessee itself on the mainframe computers which it owns in its Atlanta Data Center, in Georgia, USA, in order to provide services to those customers in connection with passenger reservations, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocesses, or consist of the development and transfer of a technical plant or technical design to such person. (For this purpose, the person acquiring the service shall be deemed to include an agent, nominee, or transferee of such person). This category is narrower than the category described in paragraph 4(a) because it excludes any service that does not make technology available to the person acquiring the service. Generally speaking, technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service may require technical input by the person providing the service does not per se mean that technical knowledge, skills, etc., are made 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 per se be considered to make the technology available. 6. A combined perusal of the above makes it clear that a particular service will be considered as fees for included services only when the person acquiring the service is enabled to apply the technology. It is also clear that even if the provision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T) * UK Grid Solution Ltd. [2023] 149 taxmann.com 209 (Delhi ITAT) * Bio Rad Laboratories Inc. [2023] 149 taxmann.com 342 (Delhi ITAT) * TSYS Card Tech Ltd. [2023] 149 taxmann.com 195 (Delhi ITAT) * Batlivala & Karani Securities (India) (P.) Ltd. [2016] 159 ITD 924 (Kolkata ITAT) * ABB Inc. [2015] 69 SOT 537 (Bangalore ITAT) * Cadila Healthcare Ltd. [2017] 162 ITD 575 (Ahmedabad ITAT) * Veeda Clinical Research (P.) Ltd. [2013] 144 ITD 297 (Ahmedabad ITAT) * Sandvik Australia Pty. Ltd. [2013] 141 ITD 598 (Pune ITAT) * Akamai Technologies Inc., In re [2018] 404 ITR 495 (AAR) * Ernst & Young (P.) Ltd, In re [2010] 323 ITR 184 (AAR) * Bharati AXA General Insurance Co. Ltd. [2010] 326 ITR 477 (AAR) * Anapharm Inc. [2008] 305 ITR 394 (AAR) * Endemol India (P.) Ltd. [2013] 40 taxmann.com 345 (AAR) Further, the Bombay High Court in the following cases has decided the case in favour of the assessee where the services did not make available technical knowledge, experience, skill, know-how or processes, or consist of development and transfer of a technical plan or technical design. * Shell India Markets (P.) Ltd. [2024] (463 ITR 222) (Bom. High Court) has held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categories of technical and consultancy services are to some extent, overlapping. Under paragraph 4, technical and consultancy services are considered included services only to the following extent: (1) as described in paragraph 4(a), if they are ancillary and subsidiary to the application or enjoyment of a right, property or information for which a payment described in paragraph (3)(a) of article 13 is received; (2) are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph (3)(b) of article 13 is received; or (3) as described in paragraph 4(c), if they make available technical knowledge, experience, skill, know-how, or processes, or consist of the development and transfer of a technical plan or technical design. Thus, under paragraph 4(c), consultancy services which are not of a technical nature cannot be included services." * The Bombay High Court in the case of Interoute Communications Ltd. [2023] (153 taxmann.com 392) has dismissed the appeal filed by the revenue authorities wherein the Tribunal has come to a conclusion that the revenue earned by the assessee was only for a service rendered and not in the nature of making any tec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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