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The ITAT held that secondment charges are not taxable as Fees for Included Services (FIS) under Article 12 of the India-USA DTAA. The tribunal found that cost-to-cost reimbursement for seconded employees cannot be treated as FTS, as the personnel are employees of the firm whose income is already taxed as salary. The court interpreted "professional services" in Article 15(2) as an inclusive definition encompassing various professional categories, not limited to those governed by professional bodies. Consequently, the tribunal directed the Assessing Officer to delete the addition, ruling in favor of the assessee and affirming that the secondment charges do not satisfy the "make available" requirement under the DTAA.
The ITAT held that secondment charges are not taxable as Fees for Included Services (FIS) under Article 12 of the India-USA DTAA. The tribunal found that cost-to-cost reimbursement for seconded employees cannot be treated as FTS, as the personnel are employees of the firm whose income is already taxed as salary. The court interpreted "professional services" in Article 15(2) as an inclusive definition encompassing various professional categories, not limited to those governed by professional bodies. Consequently, the tribunal directed the Assessing Officer to delete the addition, ruling in favor of the assessee and affirming that the secondment charges do not satisfy the "make available" requirement under the DTAA.
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