TaxTMI 
TaxTMI 
2014 (4) TMI 249
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.... company incorporated in Netherlands and is a tax resident of Netherlands. 3. Endemol Group has adopted a lean organization structure and relies on the concept of centralized shared services which provide services to group companies across the world. The applicant EIPL also has a lean organization in India and requires assistance from Endemol Holding to carry out its business efficiently and in a profitable manner and for that purpose entered into an agreement, hereafter referred to as Consultancy Agreement, with Endemol Holding on 10.01.2011 to be effective from 1st January, 2011. The agreement was for procuring certain consultancy services from Endemol Holding. The agreement would allow the applicant to consult Endemol Group on various issues. As per the Schedule 1 of the agreement, Endemol Holding will provide the following services to the applicant:- (a) General Management (b) International Operations (c) Legal advisory (d) Tax Advisory (e) Controlling and Accounting & 'reporting (f) Corporate Communications (g) Human Resources (h) Corporate Development, Mergers & Acquisitions 4. Projecting aforesaid facts and circumstances of the case, the applica....
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....e advance ruling in relation to the afore-stated payments and acknowledge that the information contained in such application is true to the best of our knowledge. The above statement is certified on the understanding that the same is required to proceed with the advance ruling as stated above and is provided on the specific request of the Authority for Advance Rulings and in no manner whatsoever, will impact any existing contractual obligations between Endemol Holding B.V and Endemol India Private Limited or create any other liability whatsoever under any other existing agreements." 6. The main submission of the applicant is that the payment made by it to Endemol Holding is for utilizing its administrative services under the Consultancy Agreement which does not fall within the purview of Article 12 of the India Netherlands Tax Treaty. It was stated that the term "Fees for Technical Services" (in short 'FTS') has been defined both in the Explanation 2 to section 9(1) (vii) of the Act as well under Article 12(5) of the India and Netherlands Tax Treaty. Though the definition in the explanation 2 to section 9(1)(vii) of the Act and that under Article 12(5) of the India-Netherland....
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....rganic Chemical Industries Ltd. vs DCIT (96 TTJ 765) and ruling of the Authority in the cases of Bharati AXA General Insurance Company Ltd (326 ITR 477) (AAR), M/S Invensys System Inc. (317 ITR 438),(AAR) Intertek Services (307 ITR 416) (AAR), Anapharma Inc. (305 ITR 394) (AAR), Ernst & Young (P) Ltd (323 ITR 184 (AAR) 8. The Revenue on the other hand submitted that the services rendered by Endemol Holding was not merely administrative but technical in nature. It was stated that as per clause (b) of "General part of consultancy agreement" between Endemol Holding BV and the applicant, the applicant will be provided "certain consultancy services" as described in schedule 1 of the consultancy agreement. This shows that the services availed by the applicant are consultancy services and are squarely covered under the definition of "Fees for Technical Services" even as per the Article 12 of the India-Netherland Tax Treaty. It was contended that as per its own admission, the holding company is making available technical knowledge, experience, skill, know-how and administrative processes which clearly fall within the definition of 'Fees for Technical Services'. This was disputed by the ....
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....d/to be rendered are listed out in schedule 1 to the agreement as noted (supra). Article 1 of the Consultancy Agreement under the head "general provision" states that the holding company has considerable expertise, knowledge and expertise in the field of management, production, exploitation and development of formats in television programmes and interactive productions, and has established as one of its tasks to disseminate such experience, knowledge and expertise in other operating companies within the Endemol Group. Operating company is not sufficiently staffed and equipped to carry out certain activities deemed necessary for efficient and profitable conduct of its business and therefore requires assistance from the holding company in relation to the services and the holding company is willing to render the services to the operating company on a regular basis. Article 1 of the consultancy agreement clearly shows that it is the "considerable experience, knowledge and expertise" of the holding company that is to be rendered and for which payments are to be made. It is also made clear that the services that are provided are certain consultancy services as described in Schedule 1 as ....
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....ght on what services can be included as technical services. These are - technical knowledge, experience, skill, know-how or processes, or the development and transfer of a technical plan or technical design. Material evidences of the actual services rendered have not been furnished by the applicant. The Revenue stated that the required details for determination of the actual nature of service were not given by the applicant. In such circumstance, we have to go by the services mentioned in the Consultancy Agreement between the applicant and the non-resident company. Nature of the services listed in Schedule 1 to the Management Consultancy Agreement require technical knowledge, experience, skill, know-how or processes. They can not be termed as merely administrative and support services as tried to be made out by the applicant. It is noticed that several attempts were made in the past to interpret the meaning of "technical services" and also the 'make available' clause in Tax Treaties. This is apparent from the case decisions cited by both the applicant and the Revenue in this very case. Broad consensus of the interpretation relate to services that require special expertise, skill an....
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....the provisions have to be read by giving a purposive interpretation to the language used. The stand is clearly untenable. The Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The question is not what may be supposed and has been intended but what has been said. This position was elaborately stated by a Constitution Bench of the Hon'ble Supreme Court in Padma Sundara Rao (dead) and Ors. V. State of T.N. and Ors. (2002)3 SCC 533. 15. We have considered the arguments in relation to details as available on record. There is no dispute about the profit arising out of the transaction in the hands of Endemol Holding BV. There is also no dispute about the services rendered outside India for which payments were made by the applicant to Endemol Holding. The applicant is an Indian enterprise and for its business activities outside India, the services on Endemol Holding were utilized. There is no material to show that Endemol Holding has any presence in India. Payments for the services were received by Endemol Holding outside ....