Secondment payments and treaty relief turn on the make available test and the true nature of professional service receipts.

Amounts paid by Indian entities for seconded employees were treated as fees for technical services under Article 12 of the India-USA DTAA and section 9(1)(vii), because the secondees retained a lien with the foreign employer, worked under a contractual control framework, and the arrangement involved training and transfer of technical knowledge, skill, experience and know-how, satisfying the "make available" test. Receipts from Indian clients for services rendered in and from the USA were examined under the professional services exclusion in Article 12(5)(e) read with Article 15; Article 15(2) was treated as an inclusive definition, and only receipts truly answering the professional-services description were eligible for treaty benefit, while the balance could be taxed as technical or consultancy services.

---

---

Issues: (i) Whether amounts received by the assessee from Indian entities towards seconded employees constituted fees for technical services under Article 12 of the India-USA DTAA and section 9(1)(vii) of the Income-tax Act, 1961; (ii) Whether receipts from Indian clients for services rendered in and from the USA fell within the exclusion for professional services under Article 12(5)(e) read with Article 15 of the India-USA DTAA.

Issue (i): Whether amounts received by the assessee from Indian entities towards seconded employees constituted fees for technical services under Article 12 of the India-USA DTAA and section 9(1)(vii) of the Income-tax Act, 1961.

Analysis: The deputation arrangement showed that the seconded personnel continued to retain their lien with the overseas employer, were repatriated after the assignment, and were subject to the contractual control framework that preserved the overseas entity's overarching relationship with them. The services were not mere reimbursement entries in substance, because the secondees were deployed to assist the Indian entities in implementing group policies, processes, and quality standards, and the arrangement involved training and transfer of technical knowledge, skill, experience, and know-how. On those facts, the "make available" requirement was satisfied and the earlier factual findings of the Tribunal could not stand against the detailed findings recorded by the assessing authority and the DRP.

Conclusion: The secondment receipts were held taxable as fees for technical services, and the Tribunal's contrary view was set aside in favour of the Revenue.

Issue (ii): Whether receipts from Indian clients for services rendered in and from the USA fell within the exclusion for professional services under Article 12(5)(e) read with Article 15 of the India-USA DTAA.

Analysis: Article 15(2) was treated as an inclusive definition and not as one confined only to persons governed by a statutory professional body. At the same time, the assessing authority had already segregated the receipts and granted treaty benefit to those services that truly answered the description of professional services, while taxing only the balance as technical or consultancy services. The Tribunal did not analyse that segregation or the nature of the retained receipts with sufficient specificity. For the receipts finally disputed in some appeals, the matter required fresh examination on the full record.

Conclusion: The Revenue succeeded on the question for AY 2020-21, while the remaining receipts-related issues in the connected appeals were remanded for reconsideration.

Final Conclusion: The batch was disposed of by upholding taxability of the secondment reimbursements as fees for technical services and by sending the remaining receipts-related controversy back for fresh adjudication where required.

Ratio Decidendi: Where secondees continue to remain linked to the foreign employer and the arrangement results in transmission of technical knowledge, skill, know-how, or training to the Indian recipient, the payment is not insulated as a mere reimbursement and satisfies the treaty's "make available" threshold for fees for technical services.

---