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TMI Blog2022 (7) TMI 1593X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle 12 of the Double Taxation Avoidance Agreement entered into between India and Singapore ('the DTAA') despite the fact that the Appellant has not 'make available' any technical knowledge, experience, skill, know-how, processes to the Indian Associated Enterprise in terms of Article 12 of India-Singapore DTAA. The Appellant hereby prays that the addition of INR 3,06,12,630 to the total income may be deleted in full. 2. On the facts and in the circumstances of the case and law, the AO erred in not granting credit for Tax deducted at source (TDS') on interest on income tax refund amounting to Rs 19,102. The Appellant hereby prays that the credit of TDS amounting to INR 19,102 be given in full. 3. On the facts and in the circumstances of the case and in law, the learned AO has erred in proposing to initiate penalty proceedings under section 270A of the Act without appreciating that none of the provisions of section 270A of the Act gets attracted in the facts of the Appellant's case. 3. To adjudicate on this appeal, only a few material facts need to be taken note of. The assessee before us is a company incorporated in, and fiscally domiciled in, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The nature of services was explained in detail, and it was highlighted that there is no transfer of technology or skill, in the process of rendition of these services, which is a sine qua non for its taxability in India. References were also made to judicial precedents in this regard. None of these submissions, however, impressed the Assessing Officer. The Assessing Officer rejected these submissions on merits, and also noted that in the preceding assessment years, the assessee had offered the said income to tax and that there is no good reason to deviate from the stand so taken by the assessee in the immediately preceding assessment years. The Assessing Officer, inter alia, observed as follows: 2.6.3 So, there is element of "make available" in these services. The consultancy services being rendered by the assessee to the AEs, have been made available to them an enduring benefit and those consultancy/technical services could be used by them for the business purposes in succeeding years. It is clear that the assessee is providing all these service to the AEs which are customized to the local needs on the basis of its expertise and global experience. Hence, on this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... experience to plan the budget and forecasts for the future. * Assisting in publicity and marketing and designing local marketing strategies - This also shows that the assessee is formulating strategies for publicity and marketing. * Implement Locally Group HR Policies relating to remuneration, benefits & promotion - The policies with regard to HR are made by the assessee and provided to MP for following. All these services show that they are not day-to-day business support services, but are those which provide long-term enduring benefit to MPI. The assessee has described the services as assisting in strategic planning, budgeting and planning future outlook, developing local business strategies, building clientele, preparation of budgets and forecasting, preparing reports for management decisions. These assistances are of such nature that involve active consultations with concerned employees of the AE and the employees cannot be passive recipients of the services, given the nature and complexity of the tasks to be accomplished. These consultations are bound to enable and enrich the recipients in this regard and would be able to use this information independently and absorb, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;make available' clause. Accordingly, we uphold the action of the TPO in treating the receipts of Rs. 3,06,12,630/- as FTS and bringing the same to tax in the hands of the assessee for the year under consideration. 5. The Assessing Officer thus proceeded to frame the impugned order, and bring to tax the receipts of Rs 3,06,12,630 as fees for technical services under article 12(4) of the Indo Singapore tax treaty. The assessee is aggrieved and is in appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. While on this issue, it will be useful to refer to the following observations made by a coordinate bench, in the case of Shell Global International Solutions BV Vs ITO [(2015) 64 taxmann.com 3 (Ahd)], as follows: 17. As for the connotations of 'make available' clause in the treaty, this issue is no longer res integra. There are at least two non-jurisdictional High Court decisions, namely Hon'ble Delhi High Court in the case of DIT v. Guy Carpenter & Co Ltd. [2012] 346 ITR 504 and Hon'ble Karnataka High Court in the case of CIT v. De Beers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales strategy, portfolio strategy" carried on by the assessee "the nature of these services is materially similar". All these services were held to be outside the scope of fees for technical services taxable under the Indo-US tax treaty. In the case of Bharat Petroleum Corpn. Ltd. v. Jt. DIT [2007] 14 SOT 307 (Mum.), another coordinate bench of this Tribunal, inter alia, held that market study covering study of supply and demand analysis, domestic refining capacity, price forecast etc did not constitute fees for technical services as it did not transmit the technical knowledge. In the case of Ernst & Young (P.) Ltd. In re [2010] 189 Taxman 409/323 ITR 184 (AAR), the Authority for Advance Ruling, inter alia, observed that "some of the services enumerated have the flavor of managerial services" but "services of managerial nature are not included in Article 13 (of Indo-UK tax treaty, which is in pari materia with the treaty provision before us) unlike many other treaties". We are in considered agreement with the views so expressed by the Authority for Advance Ruling. On the same lines are various decisions of this Tribunal in the cases of ICICI Bank Limited v. Dy. CIT [2008] 20 SOT 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee". The taxability of impugned receipts, under section 9, is thus wholly academic. We leave it at that. 9. As regards the question regarding a change in the stand of the assessee and the facts of the assessee's offering the same income to tax in the immediately preceding assessment years, nothing really turns on the stand of the assessee in the immediately preceding assessment years. There is no res judicata in the income tax proceedings and the mere fact of an assessee's offering an income to tax in an earlier year can be a reason enough to negate his otherwise lawful claim of non-taxability. The matter in required to be examined on merits, and once we find it to be an acceptable claim on merits, such taxability in the immediately preceding assessment years cannot come in the way of the assessee's lawful claim. This objection of the authorities below, therefore, does not deserve our approval either. 10. In view of the above discussions, as also bearing in mind entirety of the case, we uphold the plea of the assessee, and direct t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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