TaxTMI 
TaxTMI 
2022 (10) TMI 1049
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee for rendering certain services to the Indian companies as per the terms of "General Services Agreement" (GSA) do not qualify as "Fees for included Services" (FIS) under Article 12(4)(b) of the India- USA DTAA?" 2. "Whether on the facts and circumstances of the case and in law, the CIT(A) was justified in holding that GSA receipts are not taxable in India without appreciating that market research, target research and competitor research services provided by the assessee company to Indian companies enable them to carry out such researches in future for the Indian clients and thus, make available the technical skills, knowledge as per Article 12(4)(b) of the India-USA DTAA and as such payments for such services constitute "Fees for Included Services?" 3. "Whether on facts the CIT(A) was justified in accepting that the Neilsen Company (US) Inc., i.e.assessee and AC Nielsen ORG Pvt. Ltd. which subsequently provided services i.e. from 01/01/2007 was providing similar services ignoring the fact that no similar services were provided as mentioned in the GSA dated 28/11/2007?" 4. Whether the CIT(A) was justified on relying on the decision of IT AT which states that the decision o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....applicable to the present year also since there is no change in the clauses of the agreement. In the submissions provided, there are instances that the employees of the Indian concerns are called to attend training programme. One of such instance was the training on Hyperion Financial Management (HFM) Architecture at Hong Kong. In the invitation sent to the Indian concerns, it was mentioned as under: "Nielsen Company will conduct a HFM training in Hong Kong during March 22-23. You are selected to represent your country / sub - region to attend this training and you"ll have to pass onward the knowledge to your local team or other markets. "[Emphasis supplied] This clearly shows that technical knowledge has been made available to the Indian concerns for its use and as specifically provided in the GSA these can be redistributed to the other Associated Companies pursuant to separate agreements. It can be assumed safely that there will be various other training imparted to the Indian concerns so that the continuity of the business is ensured on the agreed objectives." 5.1 The ld. Counsel vehemently argued that the appellant submitted the facts before the AO that services rendered b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... During the year under consideration, ACNielsen had received a sum of Rs. 15,06,52,986 towards GSA Agreement from the Indian entities. In the return of income filed for the aforesaid assessment, the said receipts was claimed as exempt from Indian Income-tax on the ground that the said GSA receipts are not covered by Article 12 of the lndo-USA Tax Treaty. During the course of assessment proceedings, the learned Deputy Director of Income-tax (International Taxation) - 1(1), Mumbai ("DDIT") called for various details, which were duly submitted by ACNielsen. The DDIT called upon ACNielsen to show cause as to why not the said receipts be treated as "Royalty/ Fees for technical services" as per Indo-USA Tax Treaty and be subjected to tax in India. ACNielsen vide its letters dated 19 November 2010 and 2 December 2010 explained to DDIT the following: ■ The nature of each type of service rendered by ACNielsen under GSA, * Nature of expenditure incurred by ACNielsen for which it is reimbursed by the Indian entities; and ■ Why the said receipts would not be treated as royalty/ fees for included services as per Article 12 of the Indo-USA Tax Treaty. It was also argue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it is held that receipt under GSA is not taxable as FIS as it doesn"t satisfy "make available" criteria as per Article 12(4) of the India-US DTAA. Thus, ground no. 2 & 3 are decided in favour of the appellant." 5.4 The ld. Counsel fully relied on the order of the Coordinate Bench of assessee"s own case in case of ITA No. 4362/Mum/2015 date of order 22.05.2019. The relevant para 20 to 22 is extracted below: "20. In view of the above factual and legal discussions, we hold that the assessing officer erred in taxing the service agreement receipt as "fee for included services" as per Article 12(4) of India USA DTAA for such services as mentioned in para 4 (supra), in absence of clause in the service agreement dated 09.01.2009, that the recipient would be able to perform these services of its own without any further assistance of the assessee. 21. The ratio of decision of Cochin Tribunal in M/s US Technology Resources Pvt. Ltd. vs. ACIT (supra) relied by Id. DR for the revenue is not helpful to the revenue. In the said case the assessee rendering the services in the field of management decision making. Further, in the said case it was clearly held the expertise and technology was ma....