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TMI Blog2023 (9) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... amount received for Consulting and Engineering services as Fees for technical services (FTS) 1.1 On the facts and in the circumstances of the case and in law, the learned DRP ('Dispute Resolution Panel') and DCIT have erred in considering income from consulting and engineering services amounting to INR 21,25,145/- as Fees for technical services ('FTS'} as per Article 13 of India-UK Double Taxation Avoidance Agreement ('DTAA'). 2. Ground No. II -Taxability of amount received as common cost recharge as Royalty and Fees technical services (FTS) 2.1 On the facts and in the circumstances of the case and in law, the learned DRP ('Dispute Resolution Panel'} and DCIT have erred in considering common cost rechar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of Article 13(2)(aii) of the India - UK (DTAA). Hence, the said receipts were taxed in the hands of the assessee as FTS. Similarly, amount received towards Common Cost Recharge amounting to Rs. 4,72,39,386/- was held to be taxable as Royalty and FTS as per India - UK Double Taxation Avoidance Agreement (DTAA). It was brought to the notice of DRP that the issue is squarely covered by the decision of Tribunal in assessee's own case for the assessment year 2012-13(at pages 33 and 34 of DRP directions). The DRP ignoring the order of Tribunal in assessee's own case for assessment year 2012-13, reproduced DRP directions for Assessment Year 2015-16 dated 04/09/2018 and decided the issue against the assessee. He further pointed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional High Court in the case of Director of Income Tax vs. Credit Agricole Indosuez Ltd., 69 taxmann.com 285. 4. Shri Anil Sant representing the Department vehemently supported the impugned assessment order and prayed for dismissing appeal of the assessee. However, the ld. Departmental Representative fairly stated that the issues raised in ground No. 1 & 2 of appeal have been considered by the Tribunal in assessee's own case in the preceding Assessment Years. With regard to ground No. 3 of appeal, the ld. Departmental Representative submitted that the assessee made claim for the first time before the DRP. No such claim was made in the return of income, therefore, it was rightly rejected by the DRP. He strongly opposed admission of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd that through development and supply of technical designs / drawings / plans the assessee has made available technical knowledge, experience, skill, knowhow or processes to the service recipient so as to bring the amount received within the meaning of fees for technical services under Article-13(4)(c) of the India-UK Tax Treaty. Therefore, in our considered opinion, the amount received by the assessee has to be treated as business profit and in the absence of a PE in India, it cannot be brought to tax in India. 21. Since, we have held the amount received towards consulting engineering services to be not in the nature of fees for technical services, the reasoning of the departmental authorities with regard to cost recharge would also fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal for A.Y. 2014-15. In A.Y 2014-15 the Co-ordinate Bench in principle held that the assessee is entitled to relief in accordance with findings given in Tribunal order for A.Y. 2012-13. However, restored the issue to the Assessing Officer with a direction to assessee to demonstrate that the facts are identical to A.Y. 2012-13. The Tribunal following the decision rendered in Assessment Year 2012-13 deleted similar additions in A.Y. 2019-20 and 2020-21 (supra). Respectfully following the decision of Co-ordinate Bench in assessee's own case for the preceding and succeeding Assessment Years ground No. 1 & 2 of the appeal are allowed for parity of reasons. 6. In ground No. 3 of appeal, the assessee has assailed the findings of the DRP in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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