Make-available test limits taxation of consultancy and training fees under the India-USA DTAA where no independent know-how transfer occurs.

Consultancy and training receipts are taxable as fees for included services under Article 12(4)(b) of the India-USA DTAA only if the services make available technical knowledge, experience, skill, know-how or processes to the recipient for independent future use. Mere specialised input, technical expertise on the provider's side, or recurring service delivery is insufficient where no enduring transfer of capability occurs. On the stated facts, organisational strategy, talent acquisition, leadership development, and rewards and benefits services did not satisfy the make-available condition, so the receipts were not taxable as fees for included services and the related addition was deleted.

---

---

Issues: Whether receipts described as service fees for consultancy and training were taxable as fees for included services under Article 12(4)(b) of the India-USA Double Taxation Avoidance Agreement because the services made available technical knowledge, experience, skill, know-how or processes to the Indian recipients.

Analysis: The services were found to be consultancy services rendered in areas such as organisational strategy, talent acquisition, leadership development, and rewards and benefits. The controlling test was whether the recipient was enabled to apply the underlying technology or expertise independently in future without recourse to the service provider. Mere provision of specialised or technical input, or the fact that the services required technical skill on the provider's side, was held insufficient. The recurring and continuing nature of the services also supported the conclusion that no enduring transfer of technical knowledge or skill had taken place. Following the earlier decision on identical facts, the receipts were held not to satisfy the make-available condition.

Conclusion: The service fee receipts were not taxable as fees for included services under Article 12(4)(b) of the India-USA Double Taxation Avoidance Agreement and the addition was deleted. The interest ground was consequential, the TDS credit and refund adjustment issues were remitted for verification, and the penalty ground was premature.

Ratio Decidendi: Consultancy or technical services are taxable as fees for included services only when they make available technical knowledge, experience, skill, know-how or processes to the recipient so that the recipient can apply them independently in future.

---