Manpower support receipts do not satisfy the make available test and are not fees for technical services.

Manpower support service receipts from an Indian group entity were held not to be fees for technical services under section 9(1)(vii) or Article 12(4) of the India-USA DTAA because the arrangement did not transfer technical knowledge, experience, skill, know-how, or processes. The make available condition was not satisfied, as the services amounted only to support and facilitation from outside India. In the absence of any fresh material or distinguishing facts from the immediately preceding year's identical arrangement, the same view was followed and the addition on this ground was deleted.

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Issues: Whether receipts from manpower support services rendered to the Indian group entity constituted fees for technical services under section 9(1)(vii) of the Income-tax Act, 1961 and Article 12(4) of the India-USA Double Taxation Avoidance Agreement, and whether the make available condition was satisfied.

Analysis: The dispute turned on whether the services, though rendered for consideration, involved a transfer of technical knowledge, experience, skill, know-how, or processes so as to fall within the treaty definition of included services. The decision for the immediately preceding assessment year, arising on identical facts, had examined the same service arrangement and held that the manpower support services did not disclose any transfer of technical skill or know-how. It was held that merely facilitating collaboration or providing support from outside India did not, by itself, satisfy the make available requirement. No fresh material or distinguishing feature was brought in the present year to depart from that view.

Conclusion: The receipts did not constitute fees for technical services, and the addition made on that basis was deleted.

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