DTAA fees for technical services test failed for borrowed service receipts, with prior year treatment followed

Receipts from borrowed services were held not to fall within fees for technical services under Article 12 of the India-Singapore DTAA because the factual matrix matched earlier decisions in the assessee's own case and connected matters, and no distinguishing material showed that the treaty test for such taxation was satisfied. The Commissioner (Appeals) followed the prior year decision and granted relief, and that approach was upheld in favour of the assessee.

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Issues: Whether receipts towards borrowed services were taxable as fees for technical services under Article 12 of the DTAA between India and Singapore.

Analysis: The dispute was covered by the Tribunal's earlier decisions in the assessee's own case and in connected matters, where similar borrowed service receipts were held not to constitute fees for technical services. The factual matrix for the relevant assessment years was found to be identical, and the Commissioner (Appeals) had granted relief by following the assessee's earlier year decision. No distinguishing material was brought to show that the services rendered satisfied the treaty test for taxation as fees for technical services.

Conclusion: The receipts from borrowed services were not taxable as fees for technical services under Article 12, and the Commissioner (Appeals)'s view was upheld in favour of the assessee.

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