TaxTMI 
TaxTMI 
2022 (5) TMI 1518
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....e assessee was incorporated under the laws of the State of Texas in December 2001 and is headquartered in Dellas. 4. At the very outset, the ld. counsel for the assessee stated that in both the years, the quarrel is in respect of identical facts. It is the say of the ld. counsel for the assessee that the entire quarrel has been decided by this Tribunal in assessee's own case in Assessment Years 2010-11, 2011-12 and 2012-13. The ld. counsel for the assessee supplied copy of the decision of this Tribunal in ITA Nos. 2469/DEL/2015, 6137/DEL/2015 and 2355/DEL/2017 for Assessment Years 2010-11, 2011-12 and 2012-13 order dated 30.03.2022. 5. Per contra, the ld. DR vehemently stated that in so far as the quarrel relating to the consideration received by the assessee towards customized research advisory services is not taxable under the head "Royalty" is not as per the decision cited before the Tribunal as the same was delivered in respect of software royalty and, therefore, the decision of the Tribunal should not be followed. 6. We have given thoughtful consideration to the orders of the authorities below. The first common grievance relates to the addition on account of managemen....
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....services as required 9.5 We agree with the contention of the assesee that managerial services are outside the scope of the meaning of FIS under Article 12(4) of the India- USA DTAA. Wherever the intention of the legislature is to include managerial services within the scope of FTS/ FIS, the same has been expressly mentioned therein. This contention of the assesee finds support by the jurisdictional Delhi Court judgment in the case of Steria (supra). The relevant para of the judgment is reproduced below. 19. The next question that arises is concerning to extent to which the benefit under the India-UK DTAA can be made available to the Petitioner. As already noticed, the definition of "fee for technical services" occurring in Article 13(4) of the Indo-UK DTAA clearly excludes managerial services. What is being provided by Steria France to the Petitioner in terms of the Management Services Agreement is managerial services. It is plain that once the expression 'managerial services' is outside the ambit of 'fee for technical services', then the question of the Petitioner having to deduct tax at source from payment for the managerial services, would not arise. It ....
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....raph 4(a) because it excludes any service that does not make technology available to the person acquiring the service. Generally speaking, technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service may require technical input by the person providing the service does not per se mean that technical knowledge, skills, etc., are made available to the person purchasing the service, within the meaning of paragraph 4(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available. {emphasis supplied} Typical categories of services that generally involve either the development and transfer of technical plans or technical designs, or making technology available as described in paragraph 4(b ), include : 1. Engineering services (including the sub-categories of bioengineering and aeronautical, agricultural, ceramics, chemical, civil, electrical, mechanical, metallurgical, and industrial engineering) ; 2. Architectural services ; and ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT ....
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....e by AO on account of miscellaneous services rendered to third party clients. These services comprises of two components i.e. access to published research reports by subscribing to the same and customized research advisory. 11.1 The Ld. DR relied upon the findings of the Ld. CIT(A). The Ld. AR submitted that the assesee sold published research reports and provided custom research services to clients in India as per work orders / invoices which are on record. The published reports are general in nature and factual information is compiled from various secondary sources. Anyone in the public can subscribe to the database and on payment of requisite fee access these general purpose reports. The database and server of assessee is in USA. The database subscription is granted through a website, which allows download of published reports, annual market updates, white papers, data cuts. The published reports and database is copyright protected. The subscriber gets a non-exclusive, non-transferable right and license to use the published report. The subscription material can be used by subscriber for business purpose only by and among subscriber's employees. The ownership of and ....
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.... it is a case of Revenue. It is also not revenue's case that the impugned service has anything to do with Article 12(3). Further, the receipts under this head are not even taxable as FIS/FTS under Article 12(4)(b) of the India-US treaty. 11.3 We find force in the above submission of the assesee. By allowing access to database what assessee grants to customers is only a right to use a copyrighted material (i.e. published report). The assessee does not grant the right to use the copyright. Hence, consideration (subscription fee) received by the assesee is not taxable as royalty under the provisions of Article 12(3) of the India-USA DTAA. Similarly in customized research advisory services the assessee is providing only advisory services through emails or presentations. The output of custom research advisory is not provided through subscription mode or data base access mode and, therefore, the question of access to data base does not arise at all. Further there is no transfer of any copy right to the customers. Thus, the considerations received by the assessee towards customized research ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT advisory servic....