Underwriting commission for GDR and FCCB issues held outside fees for technical services under the treaty framework.

Underwriting commission and reimbursement of expenses received for issuing GDRs/FCCBs were held not taxable in India as fees for technical services under section 9(1)(vii) and the India-UK treaty. The Tribunal followed its earlier orders in the assessee's own case and treated the services as part of overseas investment banking transactions, concluding that they were not made available to the Indian companies within the DTAA framework. The Revenue's challenge therefore failed.

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Issues: Whether underwriting commission and reimbursement of expenses received for issue of GDRs/FCCBs by Indian companies was taxable in India as fees for technical services under the India-UK treaty and section 9(1)(vii) of the Income-tax Act, 1961.

Analysis: The issue was treated as covered by the Tribunal's earlier orders in the assessee's own case for earlier assessment years. The services were rendered in connection with overseas investment banking transactions, and the tribunal followed its prior view that such commission did not constitute fees for technical services. The treaty position was also applied on the basis that the services were not made available to the Indian companies within the meaning of the applicable DTAA framework.

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

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