Business support services not taxable as fees for technical services where the treaty make-available test was not met.

Receipts for management and business support services to an Indian subsidiary were held not taxable as fees for technical services under section 9(1)(vii) and Article 12(4)(b) of the India-Singapore DTAA. The services were treated as business/support services, and the treaty test of making available technical knowledge, experience, skill, know-how or processes was not satisfied. Applying section 90(2), the more beneficial treaty provision prevailed over the broader domestic definition, so the addition was deleted.

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Issues: Whether the assessee's receipts for management and business support services rendered to its Indian subsidiary were taxable as fees for technical services under section 9(1)(vii) of the Income-tax Act, 1961 and Article 12(4)(b) of the India-Singapore Double Taxation Avoidance Agreement.

Analysis: The dispute was held to be covered by the Tribunal's consistent view in the assessee's own earlier assessment years. The services under the continuing agreement were treated as business/support services, and it was found that the receipts did not satisfy the treaty requirement of making available technical knowledge, experience, skill, know-how or processes. Applying section 90(2) of the Income-tax Act, 1961, the treaty being more beneficial prevailed over the broader domestic definition of fees for technical services.

Conclusion: The receipts were not taxable as fees for technical services in India and the addition was deleted in favour of the assessee.

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