TaxTMI 
TaxTMI 
2009 (11) TMI 673
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....reating as covered by Article 7 of India-UK DTAA; and 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing the Assessing Officer reduce the rate of tax withholding from 15 per cent to 0.08 per cent." 2. Since the facts and circumstances are identical and the assessee being same in both these appeals, therefore, these appeals were heard together and are being disposed off by this consolidated order for the sake of convenience. We will first take up ITA No. 5451/Mum./2005. 3. The issue in this appeal lies in a very narrow compass of narrow and undisputed facts. The assessee before us is resident company and part of the WNS Group. In the relevant previous year, the assessee entered into an agreement with another group of company, i.e., WNS, U.K. for the purpose of availing sale support and account handling services for the assessee-company in the European and North American markets. Under this agreement, the assessee was to pay costs incurred by WNS, U.K. plus 6 per cent marketing and management fee for the services rendered under this agreement. The precise services rendered by WNS, U.K. are evident from the following extracts of....
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....ng; facilitating communication between WNS India and clients or prospective clients, keeping clients, updated on the status of the work relying on the status reports provided by WNS India; ensuring that clients are satisfied with the work that is being performed on their behalf, acting as a first point of client contact for any queries; highlighting any additional opportunities for the client to outsource its processes; 4.7provide managerial services to WNS India as may be requested by WNS India in relating to the Business including, but not limited to, providing assistance in developing business strategy, co-ordinating the operations of WNS India, exercising oversight over the operations, etc." 4. It is also not in dispute that in the relevant previous year, the employees of WNS, U.K., visited India for more than thirty days and, accordingly, such visits constitute service P.E. of the WNS, U.K., in terms of article 5(2)(k) of the Indo-U.K. Tax Treaty. It was in this backdrop that the assessee approached the Assessing Officer for ascertainment of tax withholding the right from remittances required to be made to WNS, U.K., which was provided services hereinabove. The Assessing....
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.... etc." For the meaning of the expression "make available", the appellant has referred to the memorandum to the India-US treaty. While referring to the memorandum, the appellant has placed reliance on the Mumbai Tribunal judgment in the case of Raymond Ltd., Mumbai v. Dy. CIT (supra ) where the Hon'ble Tribunal has referred to the Memorandum on the India-US treaty for interpreting the meaning of the expression "make available" appearing in Article 13(4)( c) of the India-UK treaty. The appellant has contended that since an employee of WNS, UK visits India for more than 30 days (i.e., 211 days) during the previous year ended March 31, 2005, WNS, UK would constitute a service PE in India under article 5(2)(k) of the India-UK treaty (read with Article 10(1) of the India-UK tax treaty). Since a service PE of WNS, UK is created in India the Income attributable to such PE shall qualify as business profits under Article 7 of the India-UK treaty. Accordingly, as per the calculations undertaken by the appellant, it is contended that a reduced rate of 0.08 per cent should be applied for deducting tax on the marketing and management fee payable by the appellant to WNS, UK. 4.5 I agree with t....
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....e article after the word "services" and before the words "make available" not only describes or defines more clearly the antecedent noun ("services") but also gives additional information about the same in the sense that it requires that the services should result in making available to the user technical knowledge, experience, skill, etc. Thus, the normal, plain and grammatical meaning of the language employed, in our understanding, is that a mere rendering of services is not roped in unless the person utilising the services is able to make use of the technical knowledge, etc., by himself in his business or for his own benefit and without recourse to the performer of the services in future. The technical knowledge, experience, skill, etc., must remain with the person utilising the services even after the rendering of the services has come to an end. A transmission of the technical knowledge, experience, skills, etc., from the person rendering the services to the person utilising the same is contemplated by the article. Some sort of durability or permanency of the result of the "rendering of services" is envisaged which will remain at the disposal of the person utilising the servic....