2024 (11) TMI 1539 - AT - Income Tax

Payments for IT support to non-resident group company not 'make available' under Article 13; not FTS, s.143(3) r.w.s.144B upheld

ITAT Del. dismissed the Revenue's appeal, holding that payments by the assessee to its non-resident group company for IT support services did not meet the ... Validity of orders passed u/s 143(3) r.w.s. 144B and u/s 143(3) - payments made by the assessee to its non-resident group company as fee for technical services as per Article 13 of the India-UK DTAA - ‘make available’ test - HELD THAT:- As decided in own case [2022 (12) TMI 1269 - ITAT DELHI] IT support services do not satisfy the make available test as no technical know-how, skill etc. were transferred to the assessee. Appeal of the Revenue is dismissed. Revenue appeals challenge CIT(A) orders reversing disallowances in assessments under section 143(3) r.w.s. 144B and s.143(3) of the Income Tax Act arising from payments to a non-resident group company claimed as fees for technical services under Article 13 of the India-UK DTAA. The tribunal noted the issues were previously considered in the assessee's own case for AY 2017-18 by a coordinate Bench, which examined the service agreement and concluded the 'make available' criterion was not met. The coordinate Bench observed: 'Whereas the facts of the case in hand show that the assessee does not gain any technical knowledge, experience or skill ... The agreement ... is perpetual and such services are provided ... on recurring basis ... if the technical knowledge, skill etc. is being made available to the assessee, then there would be no need for the assessee to take recourse to the [non-resident] for these services. ... IT support services do not satisfy the make available test as no technical know-how, skill etc. were transferred to the assessee.' Applying that precedent, the appellate authority found no infirmity in the CIT(A)'s reliance on the coordinate Bench and dismissed the Revenue's appeals.