Royalty and fees for included services under the India-US DTAA require more than access to data or advisory support.

Receipts from title process services were held not taxable as royalty because the work only collated and provided access to public-domain property data, without transfer of commercial experience, know-how, or any right to use equipment or information; the addition was deleted. Receipts from marketing support services were held not taxable as fees for included services because the advisory and promotional functions did not make available technical knowledge, experience, skill, know-how, or processes to the recipient; that addition was also deleted. The disputed tax additions on both streams were therefore set aside, leaving the assessee with only partial relief.

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Issues: (i) Whether receipts from title process services were taxable as royalty under the Income-tax Act and the India-US DTAA; (ii) Whether receipts from marketing support services were taxable as fees for included services under the India-US DTAA.

Issue (i): Whether receipts from title process services were taxable as royalty under the Income-tax Act and the India-US DTAA.

Analysis: The services consisted of collating and providing access to information already available in public databases relating to title, mortgage and tax status of properties in the United States. No material showed that the assessee transferred its own commercial experience, methodology or know-how, or granted any right to use industrial, commercial or scientific equipment or information. Mere access to extracted public-domain data did not amount to consideration for use of commercial experience within the treaty definition of royalty.

Conclusion: The title process service receipts were not royalty and the addition made on that basis was deleted in favour of the assessee.

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

Analysis: The marketing support services were advisory and promotional in nature, consisting of identifying customers, assisting with marketing, and responding to customer queries. For such consultancy services to be taxable as fees for included services under the treaty, they had to make available technical knowledge, experience, skill, know-how or processes. The services rendered did not transfer such technical capability to the recipient, and the make available condition was not satisfied.

Conclusion: The marketing support service receipts were not fees for included services and the addition made on that basis was deleted in favour of the assessee.

Final Conclusion: The tax additions on both disputed streams of receipts were set aside, while the remaining grounds were not sustained, resulting in only partial success for the assessee.

Ratio Decidendi: Under the India-US DTAA, mere access to public-domain data does not constitute royalty, and advisory or consultancy services are taxable as fees for included services only if they make available technical knowledge, experience, skill, know-how or processes.

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