Underwriting commission for overseas GDR/FCCB services not taxable as fees for technical services absent make-available condition.

Under the India-UK DTAA, underwriting commission and reimbursement of expenses for GDR/FCCB issue services were not taxable as fees for technical services because the investment banking and underwriting work was rendered outside India and was not made available to the Indian companies in the treaty sense. The Tribunal followed its earlier order in the same assessee's case and held that the receipt was not chargeable under section 9(1)(vii) of the Income-tax Act, 1961. The addition was therefore not sustained and the Revenue's appeal was rejected.

---

---

Issues: Whether underwriting commission and reimbursement of expenses received by the assessee for issue of GDR/FCCB by Indian companies were taxable in India as fees for technical services.

Analysis: The issue was covered by the Tribunal's earlier decision in the assessee's own case for an earlier assessment year. The Tribunal followed that decision and held that the investment banking and underwriting services rendered outside India did not amount to fees for technical services under the India-UK DTAA, as the services were not made available to the Indian companies in the treaty sense. The receipt was therefore not chargeable to tax in India under section 9(1)(vii) of the Income-tax Act, 1961.

Conclusion: The receipt was not taxable as fees for technical services, and the Revenue's challenge failed.

Final Conclusion: The addition was not sustained and the Revenue's appeal was rejected.

Ratio Decidendi: Under the India-UK DTAA, commission for underwriting and related overseas investment banking services is not taxable as fees for technical services unless the services are made available to the recipient in the treaty sense.

---