TaxTMI 
TaxTMI 
2022 (12) TMI 1397
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....technical services'. 1:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the fabrication charges received by it are not 'fees for technical services' either under the Income-tax Act, 1961 or under the India-Singapore Double Tax Avoidance Agreement ['DTAA'] and the stand taken by the Assessing Officer / Dispute Resolution Panel in this regard is misconceived, illegal, erroneous and incorrect. 1:3 The Appellant submits that the Assessing Officer be directed to delete the addition of Rs. 9, 11, 78,540/- so made and to re-compute its total income and the tax thereon accordingly. Without prejudice to the foregoing: 2:0 Re: Incorrect tax rate applied 2:1 The Assessing Officer has erred in taxing the alleged fees for technical service at the 25% instead of 10% in terms of Article 12(2) of the India-Singapore DTAA. 2:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the amount received by the Appellant even if taxable as 'fees for technical service' ought to be taxed at the....
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....ring the facts and circumstances of the case and the law prevailing on the subject, no interest under section 234B is leviable and the stand taken by the Assessing Officer in this regard is misconceived, incorrect, erroneous and illegal. 3. The Appellant submits that the Assessing Officer be directed to delete the interest under section 234B so levied on it and to re-compute its tax liability accordingly. Re: Unexplained tax demand 1. The Assessing Officer has erred in demanding additional tax of Rs. 2, 60,299/-. 2. The Appellant submits that the aforesaid excess tax demand is unexplained, and the stand taken by the Assessing Officer in this regard is misconceived, incorrect, erroneous and illegal. 3. The Appellant submits that the Assessing Officer be directed to delete excessive tax demand and to re-compute its tax liability accordingly. Re: General 1. The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal." 3. Brief facts of the case are that assessee is a company formed and incorporated....
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....m ingots. * Rolling the ingots into sheet stock. * Cutting the sheet stock as per specifications. * Punching the sheet to form the components of the final bushings viz end plates, ears, rails, gussets, screens etc. Thus as stated above, during the re-fabrication process, additional alloys viz Rhodium and Platinum are used. 5. The above said additional alloys belong to M/s "Owens Corning Inc (OC-US, a tax resident of United States of America) and is made available to Owens Corning Singapore as and when required. Owens Corning Singapore receives the alloys required to from M/s Owens Corning Inc, in the form of ingots, powder form, etc for the re-fabrication process described above as 'additional raw material' without any payment having been made by the receiving party. 6. These alloys, as per the MLA dated 1 April 2007 entered into between Owens Corning Inc and OCIPL, quantify to 100 kgs and 25 kgs of platinum and rhodium respectively. The MLA states that OCIPL had delivered to Owens Corning Inc these stated alloys in the manner said hereunder: 8 bushings having design no. R20- 2372-TT47B and 2 bushings Design no. R20-2469-TT7. These ....
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....ces' should be ancillary or subsidiary to the application or enjoyment of the right or property or information for which a payment described in Para 3. b) Also the services rendered by the company do not make available any technical knowledge, skills, experience etc either to OCIPL or to Owens Corning Industries India Pvt. Ltd and hence does not fall within the definition of fees for included services' as per Article 12(4)(b) of the DTAA." 11. The Assessing Officer (AO) and Dispute Resolution Panel (DRP) were not agreed with the contentions of assessee and treated assessee's receipts as FTS as per Article-12(4)(a) of the DTAA between India and Singapore. Consequently taxed the same under section 9(1)(vii) of the I.T. Act read with Article-12(4)(a) of the DTAA between India and Singapore. 12. Against this order assessee preferred an appeal before us. We have gone through the order of the AO, directions of the DRP and objections/submissions taken by assessee before various authorities below. We have gone through the process as explained by assessee through illustration also. 13. Without going into further details, as we have gone through the order of ITAT, M....
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....of the Indo-Singapore tax treaty. Yet, taxability under Article 12(4)(a) is invoked, on the ground that one of the group companies, i.e. OC-US, has received such payments from the Indian affiliate. OCIPL, which are covered by Article 12(3) of Indo-Singapore tax treaty, and by invoking Article 9. The stand of the Assessing Officer and the DRP is that since the alloys are provided by the OCUS, which is an associated enterprise under article 9, one has to proceed on the basis that the alloys are provided by the assessee, and as the services are "ancillary and subsidiary to the application or enjoyment of the right, property or information" for which payment is made to OC-US, these services are taxable as fees for technical services. 11. As far as the role of Article 9 is concerned, it comes into play when "conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises" and remains confined to bringing those profit for taxes which, but for such arrangements, an enterprise in the respective tax jurisprudence would have made. The scope of Article 9 thus is to neutra....