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The Income Tax Appellate Tribunal (ITAT) held that the consultancy services rendered by the assessee, such as organizational strategy, talent acquisition, rewards and benefits, and related leadership and development consulting, did not constitute Fees for Included Services (FIS) under Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA). The ITAT emphasized that for services to qualify as FIS, the recipient must acquire the ability to apply the technical knowledge, experience, or skill independently without recourse to the service provider in the future. The "make available" clause requires the transfer of technical knowledge, enabling the recipient to reproduce and utilize it on their own. Merely rendering consulting services that require expertise does not satisfy the "make available" requirement. The ITAT also allowed the appeal regarding reimbursements received from subsidiaries for general management charges, as no technical knowledge was made available, and the assessee merely passed on the costs incurred from third parties.
The Income Tax Appellate Tribunal (ITAT) held that the consultancy services rendered by the assessee, such as organizational strategy, talent acquisition, rewards and benefits, and related leadership and development consulting, did not constitute Fees for Included Services (FIS) under Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA). The ITAT emphasized that for services to qualify as FIS, the recipient must acquire the ability to apply the technical knowledge, experience, or skill independently without recourse to the service provider in the future. The "make available" clause requires the transfer of technical knowledge, enabling the recipient to reproduce and utilize it on their own. Merely rendering consulting services that require expertise does not satisfy the "make available" requirement. The ITAT also allowed the appeal regarding reimbursements received from subsidiaries for general management charges, as no technical knowledge was made available, and the assessee merely passed on the costs incurred from third parties.
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