Make available test limits FTS taxation: reinsurance placement commission treated as brokerage, not taxable technical services.

Commission for arranging reinsurance placements for Indian insurers was not taxable as fees for technical services because the intermediary and advisory functions did not make available technical knowledge, experience, skill, know-how or processes to the recipients. The activity was treated as facilitation or brokerage, not treaty-covered consultancy, so the receipts fell outside Article 13(4)(c) of the India-United Kingdom DTAA and section 9(1)(vii) of the Income-tax Act, 1961. Once the principal addition failed, the related royalty-based and interest issues did not survive, and the additional royalty grounds were not entertained as they did not arise from the assessment order.

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Issues: Whether the commission received for arranging reinsurance placements for Indian insurance companies was taxable as fees for technical services under section 9(1)(vii) of the Income-tax Act, 1961 and Article 13(4)(c) of the India-United Kingdom DTAA.

Analysis: The payment arose from intermediary and advisory functions in connecting Indian insurers with foreign reinsurers. The services did not involve transfer of technical knowledge, experience, skill, know-how or processes to the Indian recipients, nor did the recipients become capable of applying any such knowledge independently after the service ended. On the facts, the activity was comparable to facilitation or brokerage and not consultancy of the kind contemplated by the treaty. The claim based on royalty and the consequential interest issue did not survive once the principal addition failed, and the additional grounds relating to royalty were not entertained because they did not arise from the assessment order under appeal.

Conclusion: The receipts were not taxable in India as fees for technical services under Article 13(4)(c) of the DTAA or section 9(1)(vii) of the Income-tax Act, 1961, and the addition was deleted.

Final Conclusion: The assessee succeeded and the assessed tax addition was set aside, leaving no surviving basis for the related interest levy.

Ratio Decidendi: Under the India-United Kingdom DTAA, services are taxable as fees for technical services only when they make available technical knowledge, experience, skill, know-how or processes to the recipient; mere brokerage, facilitation or advisory assistance without such transfer is not taxable as FTS.

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