CRM service payments not taxable as fees for technical services under India-Singapore DTAA

Delhi HC held that payments received by assessee for Customer Relationship Management (CRM) services are not chargeable to tax as fees for technical services under the Act or India-Singapore DTAA. The court followed its earlier decision in the assessee's case for a previous assessment year, ruling that consideration received for licensing CRM software does not constitute royalty income under Article 12(3) of the India-Singapore DTAA. The decision favored the assessee, with no substantial questions of law arising for consideration.

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The Delhi High Court, in an appeal under Section 260A of the Income Tax Act, 1961, dismissed the Revenue's challenge to the ITAT's order for AY 2018-19 concerning payments received by the Assessee for Customer Relationship Management (CRM) services. The Revenue contended these payments constituted "fees for technical services" under Explanation to section 9(1)(vii) of the Act and Article 12(4) of the India-Singapore DTAA, arguing that the CRM software and related training provided operational benefits and independent use to Indian customers. The ITAT, following precedent for earlier years, held the receipts were not taxable as fees for technical services. The Court relied on its earlier decision in Commissioner of Income Tax Vs. Salesforce.com Singapore Pte. Ltd. (2024) 465 ITR 257, concluding "no substantial question arise for consideration" and dismissed the appeal.

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