India-UK DTAA permits bifurcation of composite receipts, while "make available" and foreign-use exceptions limit FTS taxation.

Under the India-UK DTAA, receipts under a composite contract could be separately characterised, so income attributable to services through a Service PE could be treated as business profits while other receipts remained examinable under Article 13. The Court also applied the Article 13(4)(c) "make available" test and held that advisory and technical assistance to BCCI did not transfer technical knowledge or skill for independent future use; the receipts were therefore not fees for technical services. For years when the IPL was held in South Africa and the UAE, Section 9(1)(vii)(b) was held inapplicable because the services were utilised outside India for foreign-source income.

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Issues: (i) Whether receipts under a single contract could be bifurcated between business profits and fee for technical services under the India-UK DTAA; (ii) whether the services rendered satisfied the "make available" requirement in Article 13(4)(c); (iii) whether, for the years when the IPL event was held outside India, the receipts fell within the exception in Section 9(1)(vii)(b) of the Income-tax Act, 1961.

Issue (i): Whether receipts under a single contract could be bifurcated between business profits and fee for technical services under the India-UK DTAA.

Analysis: Article 7 of the DTAA governs business profits, while Article 13 separately governs royalties and fees for technical services. Article 7(9) recognises that profits may include items of income dealt with separately in other Articles, and those special Articles are not displaced by Article 7. The presence of a Service PE under Article 5(2)(k) only determines the existence of a PE and does not control the character of all income arising under the contract. Income attributable to services performed through the Service PE could be taxed as business profits, while receipts from services falling outside that attribution remained capable of separate examination under Article 13.

Conclusion: The receipts could be bifurcated, and the challenge to such bifurcation failed.

Issue (ii): Whether the services rendered satisfied the "make available" requirement in Article 13(4)(c).

Analysis: Article 13(4)(c) requires not merely the rendering of technical or consultancy services, but that such services make available technical knowledge, experience, skill, know-how or processes to the recipient. The contractual materials showed that IMG used its expertise to research, advise, structure, and assist BCCI in relation to the IPL, but the knowledge and skill were not transferred so that BCCI could independently apply them without IMG. Continued engagement over many years also indicated that no enduring transfer of capability had occurred. Mere use of advisory material or benefits from services was insufficient to satisfy the treaty threshold.

Conclusion: The "make available" condition was not satisfied, and the receipts were not taxable as fees for technical services under Article 13.

Issue (iii): Whether, for the years when the IPL event was held outside India, the receipts fell within the exception in Section 9(1)(vii)(b) of the Income-tax Act, 1961.

Analysis: The statutory exception applies where fees are payable in respect of services utilised in a business carried on outside India or for earning income from a source outside India. For the relevant years, the IPL was held in South Africa and the UAE, so the services were utilised outside India for earning income from those foreign events. The territorial nexus and source of income pointed away from taxation in India. The contrary view taken below overlooked the effect of the event's relocation and the resultant utilisation of services outside India.

Conclusion: The exception in Section 9(1)(vii)(b) applied, and the receipts were not deemed to accrue or arise in India for those years.

Final Conclusion: The appeals succeeded in substance, the orders of the Tribunal were set aside, and the assessee obtained relief on the core taxability issues while the question of bifurcation was answered against it.

Ratio Decidendi: Under the India-UK DTAA, income from a composite arrangement may be separately characterised where the treaty so permits, but fee for technical services is taxable only if the services both fall within the technical or consultancy limb and satisfy the "make available" condition; additionally, Section 9(1)(vii)(b) does not apply where the services are utilised outside India for earning foreign-source income.

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