TaxTMI 
TaxTMI 
2010 (3) TMI 115
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....as joint partners with IC[307 ITR 418] Institute of University of Texas & IUSSTF. IUSSTF was appointed as coordinating agency on behalf of Department of Science and Technology, Government of India (hereinafter referred as DST). The objective of this programme is to identify, award and accelerate innovative new Indian technologies into the market space. IIGP will help Indian innovators to find markets globally. The participants of the programme will receive professional business development assistance to facilitate access to US, Indian and global markets. 2. The IIGP have two programme components: • I. India Innovation Growth Programme; and • II. Capacity Building on Technology Commercialization for Incubation Managers at IC institute of University of Texas (hereinafter referred to as "UT (IC[307 ITR 418])" 3. In this application, we are not concerned with the II Part of Programme. 4. DST has allocated funds to the tune of Rs. 530.30 lakhs for implementation of the programme for a period of two years i.e., 2009 and 2010. The year-wise break-up of the said amount, the payment schedule etc. are set out in detail in the application. An amount of US$ 1....
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....deputed by IC[307 ITR 418] and a workshop will be conducted in which the instructors from IC[307 ITR 418] give a power point presentation and interact with the innovators on commercialization strategies and guide them through 6 key areas of entrepreneurship. vii. DST - Lockheed Martin Innovation Competition - The top 30 innovators present their innovations to a panel of judges made up of renowned technologies and commercialization experts. At the end of these presentations, Judges from the Panel of Indian and US experts select 15 most promising innovations and gold and silver medals will be presented to 6 of them. viii. Business development - Gold and Silver Medal Innovators will receive professional business development services from the UT(IC[307 ITR 418]) and FICCI assist them to create partnerships in US and other global markets. ix. Global markets - Innovators connect with new global partners. 8. Thus, there are five partners involved in this programme, namely, DST, LMC, IUSSTF, FICCI (applicant) and UT(IC[307 ITR 418]). The IC[307 ITR 418] Institute "is a globally recognized "think and do" component of the University of Texas whose mission is to engage in cutting-....
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....nce ruling: i. Whether on the facts and circumstances of the case, the IC[307 ITR 418] Institute of University of Texas, Austin, USA executing the agreement between FICCI and UT (IC[307 ITR 418]) is covered by the Double Taxation Avoidance Agreement (DTAA) between India and USA, therefore, the provisions of the Income-tax Act, 1961 will not be applicable? ii. Whether on the facts and circumstances of the case UT (IC[307 ITR 418]) is not liable to pay income-tax in India out of the payments received by it from FICCI in instalments? iii. Whether on the facts and circumstances of the case, FICCI is not required to deduct tax under the provisions of Section 195 of the Income-tax Act, 1961 in respect of the payments made by it to UT (IC[307 ITR 418]) for execution of the agreement? iv. If the answers to questions (ii) and (iii) above are in the negative, which are the amounts liable to tax and what rate of tax would be applicable to such payments? 13. 1st Question: As IC[307 ITR 418] Institute of University of Texas, USA, is located in USA and it is liable to pay tax by reason of place of incorporation and the place of management, the said Institute has to be treated as r....
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....cquiring the service is enabled to apply the technology. The fact that the provision of the service may require technical input by the person providing the service does not per se mean that technical knowledge, skills, etc., are made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available." 16. In the case of Intertek Testing Services India P.Ltd2., this Authority after extracting the relevant portion of MOU, clarified the meaning of the expression thus: "The service should be aimed at and result in transmitting the technical knowledge, etc., so that the payer of service could derive an enduring benefit and utilize the knowledge or know-how in future on his own without the aid of the service provider. By making available the technical skills or know-how, the recipient of the service will get equipped with that knowledge or expertise and be able to make use of it in future, independent of the service provider. In other words, to fit into the terminology "make available", the technical knowledge, skills, etc., must remain with....
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.... formulation (c) finance, (d) technology marketing strategy, (e) technology commercialization strategy and (f) presentation skills. It is stated in attachment-A that the length of the modules will range from 2 to 2.5 days each and all instructions will be delivered in India at facilities to be provided by FICCI. 21. The applicant has clarified that Commercialization of technologies/Innovations is the main aim of both the programmes i.e. DRDO and DST projects. The assessment process of the technologies, short-listing methods and preparation of Quick-look (technology assessment) reports are common to the two projects. In both the programmes, FICCI is responsible for the business development of the selected technologies in Asia and Africa. IC[307 ITR 418] looks after the same in America and European countries. 22. After the first hearing, the Director of the applicant has filed a note in which he explained the various steps involved in the programme. The item 'Entrepreneurship Workshop' and 'Innovators' competition', i.e. steps 6 and 7 were not there in the DRDO project (which was considered in AAR/811/2009). Not much turns on innovators' competition. Only step no. 6 i.e. Entrep....
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....s relating to MS course in technology commercialization. It is contended that this type of exposure to the innovators simulating class-room teaching module cannot be said to have made available any technical knowledge, experience, or skills possessed by the Institute or its faculty. It is pointed out that the power-point presentations make it clear that the exposure is of a general nature, the source of which is the University curriculum found on the websites. 25. Having regard to the clarifications given by the applicant and after having gone through the enclosures contained in the booklet, we find substance in the contention of the applicant. We do not find any distinguishing feature of substantial nature so as to persuade us to reach a conclusion different from that recorded in AAR/811/2009. 26. We may, for instance, analyze Enclosure-C. The representative of IC[307 ITR 418] Institute had made a power-point presentation of a "Short course on the Practical Principles of Technology Commercialization". In the prefatory remarks, it is stated that the short course is 5 to 6 hours and covers only the real important points. The practical principles, it is indicated, are based on ....
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....weaknesses, understand buyer behaviour and analyze market structures. Then, the Go-to Market strategy is discussed starting with "what is the best business model to succeed in this market? Then, technology commercialization process and stages are explained in the form of a diagram. The power-point presentation ends with the 'next steps' - "Delivery of reports, Develop competitive analysis tools and Prepare to win a medal. 28. This is what is broadly contained in Enclosure C of the booklet filed by the applicant. 29. The following observations made in AAR/811/2009 would equally apply to the present case. On a consideration and analysis of the various services and assistance rendered by UT, we are unable to reach the conclusion that the payment received by UT under the Agreement would amount to 'fee for included services' within the meaning of para 4(b) of Art.12. Earlier, we have explained the true scope and meaning of the expression 'make available' occurring in para 4(b). Most of the services no doubt answer the description of technical and consultancy services. Few of them are managerial in nature. But, none of the technical/consultancy services and related activities un....