Make available test and arm's length remuneration barred treaty taxation and profit attribution on these facts.

Technical services are taxable as fees for included services under the India-USA treaty only where they "make available" technical knowledge, skill, experience or know-how so the recipient can apply it independently in future; mere rendition of services, even if technically specialised, is insufficient, and the related consideration was not taxable on that basis. Profits could not be further attributed to a dependent agency permanent establishment where the Indian affiliate was already remunerated at arm's length for the relevant activities; absent any finding that the arm's length compensation was deficient, no additional business profits remained taxable in India. The additions on both counts were deleted.

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Issues: (i) Whether the services rendered by the non-resident made available technical knowledge, experience, skill or know-how so as to be taxable as fees for included services under Article 12(4)(b) of the India-USA tax treaty. (ii) Whether any amount could be brought to tax as business profits attributable to a dependent agency permanent establishment when the Indian affiliate was remunerated at arm's length.

Issue (i): Whether the services rendered by the non-resident made available technical knowledge, experience, skill or know-how so as to be taxable as fees for included services under Article 12(4)(b) of the India-USA tax treaty.

Analysis: The expression "make available" requires more than the rendition of technical or consultancy services. The service must transmit technical knowledge, skill, experience or know-how to the recipient so that the recipient can apply it independently in future without the aid of the service provider. Mere provision of services, even if they involve technical effort, does not satisfy this test unless there is transfer of technology or enduring ability in the recipient to use the know-how on its own.

Conclusion: The services did not make available technical knowledge, experience, skill or know-how, and the consideration was not taxable as fees for included services under Article 12(4)(b).

Issue (ii): Whether any amount could be brought to tax as business profits attributable to a dependent agency permanent establishment when the Indian affiliate was remunerated at arm's length.

Analysis: Even assuming the existence of a dependent agency permanent establishment, only profits attributable to the functions performed and risks assumed through that establishment can be taxed in India. Where the Indian affiliate is compensated at arm's length for the relevant activities, nothing further remains to be attributed to the foreign enterprise. The addition made on the premise of PE attribution could not survive in the absence of a finding that the arm's length remuneration was deficient.

Conclusion: No further profits were attributable to a permanent establishment, and the business income addition could not be sustained.

Final Conclusion: The additions made both as fees for included services and as attributed business profits were deleted, and the assessee obtained full relief.

Ratio Decidendi: For treaty purposes, technical services are taxable as fees for included services only when they make available technical knowledge or know-how to the recipient, and where an associated enterprise is remunerated at arm's length, no further profit attribution to a permanent establishment is permissible absent a contrary finding on the arm's length nature of the remuneration.

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