Make available test and royalty principles limit taxability of consultancy, support services, platform access, and TDS credit claims.

Consultancy and support service receipts were held not taxable as fees for included services under the India-USA DTAA because the services were advisory or support in nature and did not satisfy the make available test under Article 12(4). Subscription fees for access to the NPS Prism Platform were held not to be royalty under the Act or the DTAA because access to a platform does not, by itself, confer any right to use copyright. A declaration under the Vivad Se Vishwas Scheme was stated not to amount to tacit acceptance of taxability in later years. TDS credit on interest income required verification of supporting proof, with corresponding income to be taxed in computing the correct liability.

---

---

Issues: (i) Whether consultancy services receipts were taxable in India as fees for included services under the India-USA DTAA; (ii) whether support services receipts were taxable in India as fees for included services under the India-USA DTAA; (iii) whether subscription fee for access to the NPS Prism Platform was taxable as royalty under the Act and the India-USA DTAA; (iv) whether settlement of past disputes under the Vivad Se Vishwas Scheme could be treated as tacit acceptance of taxability in later years; and (v) whether credit for tax deducted at source on interest income was to be granted.

Issue (i): Whether consultancy services receipts were taxable in India as fees for included services under the India-USA DTAA.

Analysis: The consultancy services were examined against Article 12(4)(a) and Article 12(4)(b) of the India-USA DTAA. The services were held to be advisory and consultancy in nature, not technical services. Even otherwise, the decisive test was whether technical knowledge, skill, know-how or experience was made available to the Indian entity so that it could apply the same independently. The record did not show any such making available, and the services continued on a recurring basis, which supported the absence of transfer of usable technical capability.

Conclusion: The consultancy receipts were not chargeable as fees for included services and the addition was deleted in favour of the assessee.

Issue (ii): Whether support services receipts were taxable in India as fees for included services under the India-USA DTAA.

Analysis: The support services were tested on the same treaty standard. The core requirement remained the make available condition under Article 12(4)(b). The long-running nature of the arrangement showed that the Indian recipient remained dependent on the foreign service provider, which negatived any conclusion that technical knowledge, know-how or skill had been transferred so as to enable independent use.

Conclusion: The support services receipts were not fees for included services and the addition was deleted in favour of the assessee.

Issue (iii): Whether subscription fee for access to the NPS Prism Platform was taxable as royalty under the Act and the India-USA DTAA.

Analysis: The subscription arrangement was examined to determine whether it involved use of, or right to use, copyright. Mere access to a platform or copyrighted material was distinguished from transfer of copyright itself. On the facts, the subscribers obtained use of the platform and not any copyright interest or right to exploit copyright.

Conclusion: The subscription fee did not constitute royalty and the addition was deleted in favour of the assessee.

Issue (iv): Whether settlement of past disputes under the Vivad Se Vishwas Scheme could be treated as tacit acceptance of taxability in later years.

Analysis: The statutory framework of the Vivad Se Vishwas Scheme and the CBDT circular clarified that a declaration under the scheme does not amount to conceding the tax position or to acquiescence on the disputed issue. A past settlement therefore could not be used as an admission against the assessee for subsequent years.

Conclusion: The argument of tacit acceptance was rejected and the assessee succeeded on this ground.

Issue (v): Whether credit for tax deducted at source on interest income was to be granted.

Analysis: It was accepted that credit could not be denied merely because the deduction was not reflected in Form 26AS if supporting proof was available. At the same time, the corresponding interest income had to be brought to tax while working out the correct liability, and the Assessing Officer was directed to verify the proof and give effect accordingly.

Conclusion: Direction was issued to consider the TDS proof and corresponding income while computing the correct tax liability, resulting in partial relief to the assessee.

Final Conclusion: The additions relating to consultancy services, support services, and subscription fee were deleted, the Vivad Se Vishwas objection failed, and limited relief was granted on the TDS-credit issue, leaving the appeal partly allowed.

---