Overseas agents' cost-sharing payments to non-resident shipping enterprise held not "technical service fees" under DTAA Article 13(4)

The dominant issue was whether pro rata amounts paid by overseas agents to a non-resident shipping enterprise were taxable in India as "fees for technical services" under Article 13(4) of the applicable DTAA and chargeable at 20% under s.115A. Applying the principle that "reimbursement" exists only where the payment is bereft of any profit element, the Court held that the agents' contributions represented mere cost-sharing without profit for any technical services and arose from the shipping business. Consequently, the receipts could not be brought to tax in India as FTS, and the assessment treating them as taxable was rejected in favour of the taxpayer.

---

---

The Supreme Court issued a short procedural order in a civil matter. The Court recorded that "Leave granted," thereby converting the petition into an appeal for adjudication on merits. It further directed that the present case is "To be heard along with C.A. No. 3911/2015," indicating that the appeal will be listed and argued together with the connected civil appeal, likely because of overlapping questions of law and/or fact. No substantive findings, legal reasoning on merits, or determination of rights and liabilities were rendered in this order; it is confined to admission (grant of leave) and tagging for joint hearing.

---