TaxTMI 
TaxTMI 
2023 (1) TMI 327
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.... directed against the order dated 19th February, 2020 passed by the Income Tax Appellate Tribunal Kolkata, 'C' Bench, Kolkata in ITA No.1276/Kol/2018 for the Assessment Year 2010-11. The revenue has raised the following substantial questions of law for consideration : (a) Whether the Learned Tribunal has committed substantial error in law in deleting the addition made by the Assessing Officer by not taking note of the Ruling which is binding pronounced by Authority of Advance Ruling (AAR) which inter alia held that consideration for the various services was taxable in hands of Timken USA both under the Income Tax Act, 1961 as fees for Technical Services (FTS)/Fees for Included Services (FIS) under Article 12 of the Indo-USA Trea....
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....ouped into three categories. Question nos.(a) and (b) deal with the effect of the ruling rendered by the Authority of Advance Ruling (AAR). Question no.(c) deals with the services provided by the assessee to Timken India Limited (TIL) and substantial question of law no.(d) deals with the services provided by the third party. On the first two substantial questions of law, we find that the Tribunal had taken note of its earlier decisions for the assessment years 2002-03 to 2007-08 and dismissed the appeal filed by the revenue upholding the order passed by the Commissioner of Income Tax (Appeals)-22, Kolkata dated 28^th March, 2018. Though the revenue had preferred appeals as against the said order passed by the Tribunal for the assessment ....
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.... shall be invoiced." The question which came up for consideration before the CIT(A) was interpreting the terms and conditions of this agreement. The contention of the revenue is that the fee received is for included services as provided in Article 12 of the Indo-US Treaty and, therefore, liable to tax in India. It is important to note that in terms of paragraph 4(b) of Article 12 of the Indo-US Treaty, the scope of Article 12 was explained by pointing out that generally speaking technology will be considered made available when the person acquiring the services is unable to apply the technology. The fact that the provision of service may require technical input by the person providing the service does not par se mean that technical knowl....
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....of Section 44D(b) of the Act. The Hon'ble Court while framing the issue for consideration by its judgment reported in (2016) 4 TMI 592 Cal held that the issue pertains to machinery of presumptive tax provided for in the provision and the contention of the petitioners that apparent shutting out of an assessee's option to claim deduction from the gross income in respect of matters covered by the provisions is unreasonable and as such, falls foul of Article 14 of the Constitution. In the decision rendered in the said writ petition, the Court also examined the binding nature of the ruling given by the AAR and the following paragraphs would be relevant: "24. Before coming to the key question as to whether the foreign company in this cas....
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....d to on account of technical services under the agreement of August 2, 2000 - cannot be seen to be covered by the opinion of December 6, 2004 rendered by the Authority on Advance Rulings. Even if the name of the Indian company is deleted as a co-petitioner, the foreign company would be entitled to maintain a petition under Article 226 of the Constitution to complain of taxing provision being unreasonable or ultra vires the Constitution." The above decision has attained finality as the revenue had not carried the matter in appeal. This aspect was also noted by the learned Tribunal but in its view, as having come to a factual conclusion that the assessee is rendering only advisory service and it cannot be treated as included services under....