Fees for included services under the Indo-US DTAA covered supply of technical personnel; receipts were taxable in India.

Receipts of a non-resident for supplying technical personnel to an Indian company were treated as fees for included services under Article 12 of the Indo-US DTAA. On a reading of the contract as a whole, the personnel remained employees of the non-resident, which retained control over deployment, compensation, statutory compliance and contractual performance. The arrangement was therefore not a mere manpower placement under the Indian company's control. Because the services were rendered through technical personnel and made available technical knowledge, experience, skill and know-how, the receipts were taxable in India and the assessee's appeal failed.

---

---

Issues: Whether the receipts received by a non-resident company for supplying technical personnel to an Indian company were taxable in India as fees for included services under Article 12 of the Indo-US DTAA.

Analysis: The contract, read as a whole, showed that the personnel supplied were employees of the assessee and that the assessee retained responsibility for their deployment, compensation, statutory compliance, and contractual performance. The arrangement was not treated as a mere placement of manpower under the control of the Indian company. The services were held to fall within Article 12(4)(b) because they involved rendering technical services through technical personnel and made available technical knowledge, experience, skill and know-how to the Indian company, on the footing of the treaty example concerning transfer of technical capability.

Conclusion: The receipts were held taxable in India as fees for included services, and the assessee's appeal failed.

---