Make-available test under the India-USA DTAA barred tax on reserve certification fees, so no withholding was required.

Payment to a non-resident for third-party certification of oil and gas reserves was held not to be taxable as fees for technical services or fees for included services under the India-USA DTAA because the services were rendered outside India and did not make available technical knowledge, experience, skill, know-how or processes to the recipient. In the absence of this make-available element, the receipt could not be taxed on that basis, and, with no permanent establishment shown in India, it could not be assessed as business profits either. The alternative contention on section 44BB was not examined after the principal issue was decided in favour of the assessee, and no tax was required to be withheld at source on the remittance.

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Issues: Whether the payment made to the non-resident for third-party certification of oil and gas reserves was chargeable as fees for technical services or fees for included services, so as to require deduction of tax at source.

Analysis: The payment related to reserve certification services rendered outside India. The Tribunal followed its earlier decisions in the assessee's own cases and held that the services did not make available any technical knowledge, experience, skill, know-how or processes to the assessee. In the absence of such make-available element, the payment could not be treated as fees for included services under Article 12 of the India-USA DTAA. Once the DTAA did not permit taxation on that basis, the receipt could not be brought to tax as business profits in India in the absence of a permanent establishment. The alternative contention regarding section 44BB was not examined after the principal issue was decided for the assessee.

Conclusion: The payment was not taxable in India as fees for technical services or fees for included services, and the assessee was not liable to deduct tax at source on the amount remitted to the non-resident.

Ratio Decidendi: Technical services are taxable as fees for included services under the India-USA DTAA only when the service recipient is made able to apply the technical knowledge, skill, know-how or processes independently; absent that make-available element, the payment is not taxable on that basis.

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