TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the payment made for witness testing and certification services to a US resident constituted fees for included services under Article 12 of the Indo-US DTAA and was therefore chargeable to tax in India, so as to attract disallowance under section 40(a)(i) of the Income-tax Act, 1961.
Analysis: The payment was made for testing and certification required for export markets, and the service provider rendered specialized technical and certification services. Under Article 12(4)(b) of the Indo-US DTAA, fees for included services arise only where technical knowledge, experience, skill, know-how or processes are made available to the recipient so that the recipient can apply the technology independently. The services here merely involved carrying out certification and testing; they did not enable the assessee to perform such certification on its own. The make available condition was therefore not satisfied, and the amount was not taxable in India under the treaty.
Conclusion: The payment was not fees for included services under the Indo-US DTAA and no tax was deductible at source; the disallowance under section 40(a)(i) was not sustainable. The issue was decided in favour of the assessee.
Ratio Decidendi: Technical or consultancy services are taxable as fees for included services under Article 12 of the Indo-US DTAA only when they make available technical knowledge, experience, skill, know-how or processes to the recipient.
TaxTMI 
