TaxTMI 
TaxTMI 
2018 (1) TMI 670
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....as Fees for Technical services ("FTS") under Article 12 of India- Singapore Tax Treaty ("Tax Treaty") by not appreciating: * that such functions do not 'make available' any technical knowledge, skills, expertise etc to the India affiliate; * judicial precedents relied upon by the appellant, inter alia, wherein similar functions were held not to 'make available' any technical knowledge, skills etc to the recipient; * reliance placed by appellant on other Tax Treaties and/or rulings for interpretation of 'make available' concept as per rules of interpretation. 2. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in making and the Hon'ble DRP has erred in confirming addition of tax deducted at source ("TDS") of Rs. 84,87,498, deducted by India affiliate while making payment of administrative support fee, on account of grossing up of such fee by not appreciating that such fee was actually paid 'gross of tax' to the appellant and the India affiliate was not liable to pay any amount over and above administrative support fee of Rs. 8,03,91,497 (inclusive of TDS of Rs. 84,87,498). 3. On the facts and in the....
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....urther in para No. 5.1 it submitted only 8 emails out of which 5 are just one liner and balance three are with respect to sending templates. Therefore, he held that Rs. 80391497/- received by the assessee from Indian entity is chargeable to tax as fees for technical services u/s 9(1) (vii) of the Act. He further held that in terms of Article 12(4) of India-Singapore DTAA is attracted, as the assessee has made available the administrative support services. He also drew support from the submission of assessee that its employees visit India in connection with rendering of services and further the assessee did not divulge the specific details as called for but submitted cryptic emails and communications and did not divulge specific details as asked for. He further held that this services are rendered by working closely with employees Indian affiliate for customizing the needs of the payer that helps in improving the performance by employing the best practices and industry experience that assessee possesses in the functions of management, finance and accounts and IT. Therefore, these services are made available and hence, fall within the purview of FTS under the Indian-Singapore Tax Tre....
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....t made available. He referred para No. 5 of the order of the ld AO wherein, the services rendered are with respect to MIS and accounting support and information technology support service. He submitted that if the mails of these services can be looked into it is evident that these mails are provision of simple services. He further referred to the administrative support agreement and stated that assessee has not submitted any evidence with respect to marketing and advertising support as well as treasury functions support. He further supported that in MIS and accounting support also the assessee has only shown the emails pertaining to templates. With respect to the IT support he submitted that these emails do not show how the services are being not made available because they are merely for the query related for system not allowing saving of the data. The other mail is just a query showing the accounting head. He submitted that once this information is shared the recipient of the service would definitely use the identical method to solve that issue. He further submitted that repeatedly doing same thing will definitely make available the services to the service recipient and therefore....
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....entities. In respect to information technology support services simple queries were raised with respect to the saving of data and exact location of certain accounting heads. Further, naturally the copies of the bills do not show the nature of services and does not help in examining whether it makes available the impugned services. Before the lower authorities, assessee has not submitted the complete details. From the above scanty details submitted by the assessee before the Ld. assessing officer, it is apparent that the natures of services rendered by the assessee are very preliminary, basic, or simple support systems. Looking at the nature of the queries in the email as well as the nature of information that is transmitting between the assessee to the service recipient, do not show that if those services are provided for longer period, how the service recipient does not become capable of solving those issues on its own. The ld DRP has made correct observation that in such services if they were provided for a longer period, then naturally recipient of service would be capable of performing on its own. „Make available‟ definitely means that person receiving the service i....
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....eement relating to design, modification, upgrading, and maintenance of management information systems and procedures and standard for maintenance of systems documentation. However, in the impugned agreement before us the MIS and accounting support services speaks about internal accounting standards and procedures, US GAAP reporting and budgetary control system. Furthermore, the tax and legal services rendered in those agreements clearly spokes about the legal services provided as well as drafting, reviewing, and approval of various commercial and financial agreements. One of the services mentioned there in accounting consultancy services matches with the MIS and accounting support services before us. The ld Authorised Representative also could not show that services mentioned in both these agreements are similar. Further, in that decision it was noted that copies of details of emails were produced before the lower authorities as well as before us. In that appeal it was the submission of the assessee that it is merely reimbursement of an expenditure and therefore, withholding tax do not apply which was recorded by the ld 1st Appellate Authority. Further, for that year, no informatio....