Technical design transfer under the India-Canada treaty qualifies as fees for included services without a make-available test.

Technical and consultancy services involving preparation and transfer of drawings, reports and designs for an Indian project were held to fall within Article 12(4)(b) of the India-Canada tax treaty. The clause was read disjunctively, so development and transfer of a technical plan or technical design is independently covered and does not require the recipient to be enabled to apply the knowledge in future projects. The receipts were therefore taxable as fees for included services at the treaty rate. The separate contention on interest under section 234B did not survive, as it had already been decided against the Revenue in an earlier binding ruling.

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Issues: Whether the consultancy and design services rendered to the Indian project constituted "fees for included services" under Article 12(4)(b) of the India-Canada tax treaty, so as to be taxable at the treaty rate, and whether the alternative contention relating to interest under section 234B survived in view of the earlier binding decision.

Analysis: The services rendered were technical or consultancy services involving preparation and transfer of technical drawings, reports, and designs for infrastructure projects. The relevant treaty provision covers not only services that "make available" technical knowledge, experience, skill, know-how or processes, but also services consisting of the development and transfer of a technical plan or technical design. The words in clause (b) are to be read disjunctively, and the provision is not confined to cases where the recipient is enabled to independently apply the technical knowledge in future projects. Transfer of technical drawings or designs for use by the other contracting state is sufficient. The question relating to interest under section 234B had already been answered by the Court in an earlier decision against the Revenue.

Conclusion: The receipts were covered by Article 12(4)(b) and taxable as fees for included services, and the question on section 234B did not survive independently.

Final Conclusion: The Revenue's appeal failed on the substantive treaty issue, and the assessee succeeded on the central question of taxability.

Ratio Decidendi: Under Article 12(4)(b) of the India-Canada treaty, development and transfer of a technical plan or technical design is independently covered and need not satisfy the "make available" requirement applicable to the other limb of the clause.

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