Reimbursement of expenses is not fee for technical services where the payments lack technical character under the treaty and tax law.

Reimbursement of marketing fees, frequent flyer programme fees, frequent guest programme fees and reservation fees did not constitute fee for technical services under Article 12(4) of the Indo-Singapore DTAA or section 9(1)(vii) of the Income-tax Act, because earlier Delhi High Court decisions had already held that such reimbursements lacked the requisite technical character. On that binding precedent, no substantial question of law arose in the revenue's appeals, and the disputed receipts were not assessed as fee for technical services. The issue was therefore answered against the revenue and in favour of the assessee.

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Issues: Whether reimbursement of marketing fees, frequent flyer programme fees, frequent guest programme fees and reservation fees received by the assessee could be treated as fee for technical services under Article 12(4) of the Indo-Singapore DTAA and Section 9(1)(vii) of the Income-tax Act, 1961.

Analysis: The issue was held to be covered by earlier decisions of the same court, which had already determined that such reimbursements do not assume the character of fee for technical services. In view of the binding precedent, no substantial question of law arose for consideration in the revenue's appeals.

Conclusion: The issue was answered against the revenue and in favour of the assessee.

Final Conclusion: The appeals were not entertained on merits and the assessment of the disputed reimbursements as fee for technical services was not upheld.

Ratio Decidendi: Reimbursement of expenses, without the requisite character of technical services, does not constitute fee for technical services under the treaty or the Act.

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