TaxTMI 
TaxTMI 
2023 (3) TMI 255
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....nce Agreement (DTAA), respectively. 3. Briefly the facts are, the assessee is a non-resident corporate entity incorporated in the United States of America (USA). The assessee is a subsidiary of Anand NVH Products Pvt. Ltd. (Anand, India), an Indian Company. Basic activity of the assessee is providing marketing support services to its parent company in India in terms with marketing support services agreement executed on 15.10.2014. In the year under consideration, the assessee received an amount of Rs.5,91,71,530/- from the parent company in India towards provision of marketing support services. Before the Assessing Officer, the assesse submitted that the amount received under the marketing support services agreement, being in the nature of business profit, is not taxable in India in absence of a permanent establishment (PE).The Assessing Officer, however, was not convinced with the submission of the assessee. After analyzing the terms of the marketing support services agreement he was of the view that the services rendered by the assessee to the parent company in India are in the nature of consultancy services,as, they relate to matters of strategic and operational importance an....
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....essee makes available the technical knowledge, know-how, experience or skill etc. to the recipient of such service, it will not fall within the category of FIS under Article 12(4)(b) of the Tax Treaty. He submitted, in the facts of the present appeal, the department has failed to establish that the assesse has made available technical know-how, knowledge, experience, skill etc. to the recipient of such services, which has enabled the recipient to utilize the same independently without having to depend upon the service provider. Thus, he submitted, the amount received by the assessee from the provision of marketing support services does not qualify as FIS under Article 12(4)(b) of the Tax Treaty. In support of such contention, he relied upon the following decisions: 1. DIT Vs. Guy Carpenter & Co. Ltd. [2012] 18 ITR 333 (Delhi High Court) 2. CIT Vs. De Beers India Minerals (P) Ltd., 346 ITR 467 (Kar.) 3. Fractal Analytics Pvt. Ltd. Vs. DCIT, ITA No. 3511/Mum/2015. 4. DCIT Vs. Forum Homes (P.) Ltd., [2021] 132 taxmann.com 223 (Mumbai -Trib.) 5. H.J. Beinz Company Vs. ADIT, [2019] 108 taxman.com 473 6. Without prejudice, he submitted, the....
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....vice Recipient. 2. Keeping the Service Recipient apprised of governmental, business and regulatory developments in the USA, that may impact the Service Recipient's business interests. 3. Gathering information as to the adaptability of the Service Recipient's products, with respect to the target market in USA; 4. Providing expert advice on developing the Service Recipient's marketing strategy and marketing campaigns. 5. Attending meetings/conference call/video conference for the promotion of the Service Recipient's products; 6. Providing management of the Service Recipient with relevant, reliable, valid, and current information with regard to the products of the Service recipient and with regard to the US market; 7. Gathering the necessary data and analysing and interpreting the information that has been gathered to enhance the marketability of the Service Recipient's products. 9. It is the case of the assessee that the services provided to the parent company are not in the nature of either technical or consultancy services and, even if they are, they do not make available technical knowledge, experience, skill, know-h....
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....company and getting information regarding the regulatory measures in USA. The scope of services also provide for expert advice on developing market strategy and marketing campaign, attending meetings, conference etc. for the promotion of parent company's products, providing relevant reliable and current information with regard to the products of parent company with regard to USA market and gathering data for enhancing the marketability of parent company products. However, they are not of the nature to term them as either technical or consultancy services. Even assuming that some amount of consultancy is involved, however, the question which begs an answer is whether, make available condition of Article 12(4)(b) is satisfied. Article 12(4)(b) provides that a consideration received from provision of technical or consultancy services can be treated as FIS only when it makes available technical knowledge, experience, skill, know-how or processes to the service recipient. 11. The term 'make available' has been interpreted in various judicial precedents to mean that there must be a transfer of technical knowledge, experience, skill, know-how etc. from the service provider to service r....