TaxTMI 
TaxTMI 
2022 (12) TMI 1402
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....ssessing Officer, the assessee provides management support services, such as, administration, management, marketing and sale of company's product and other services. For providing such services to the Indian subsidiary, namely, Wolters Kluwer (India) Pvt. Ltd. during the year under consideration the assessee had received an amount of Rs.1,53,36,510/-. For the assessment year under dispute, the assessee filed its return of income offering nil income claiming that the amount received by the assessee from providing management support services is not taxable in India. In course of assessment proceedings the Assessing Officer called upon the assessee to explain why the fee received towards management support services should not be treated as FTS both under the provisions of Section 9(1)(vii) of the Act as well as under the tax treaty. In reply, the assessee submitted that as per Article 12(3)(b) of the India-Belgium tax treaty, FTS includes payment received for services of managerial, technical or consultancy nature and chargeable to tax @10%. However, the assessee submitted, the taxation of FTS under India-Belgium tax treaty can be altered or reduced on account of Most Favoured Nation ....
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....ppeals) observed that while providing consultancy services the assessee makes available some skills to the recipient. While coming to such conclusion learned Commissioner (Appeals), though, accepted assessee's contention that services were rendered offshore with no point of contact where the employees had visited in India or services have been rendered in India, however, he observed that assessee was constantly guiding and advising the Indian subsidiary on the manner and mechanism on which Indian business was to be developed. Thus, on the aforesaid basis, he held that services rendered are in the nature of consultancy services. However, he accepted that the entire amount received by the assessee cannot be attributed to consultancy services alone. He observed, amount received from services, such as, business planning, product management, business development, accounting and budgeting, planning, logistics and reporting, client contract and preferred provider agreement, finance and accounting system, human resource services, information system, corporate communication, legal services, etc. actually enable the recipient to apply the knowledge received. Alleging that segmental details o....
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....-933 - ITAT - 2021) 10. Magotteaux International SA (141 taxmann.com 8) 11. Invensys Systems Inc. vs. DIT (AAR No. 796 of 2009) 12. Apollo Tyres Ltd. (2018) 92 taxmann.com 166 13. US Technology Resources Pvt. Ltd. (97 taxmann.com 642) 14. CIT vs. De Beers India Minerals (P) Ltd. - (346 ITR 467) 15. Koninklijke Philips Electronics Pvt. Ltd. N.V. (2018) 99 taxmann.com 23 16. SCA Hygiene Products AB ITA No. 7315/Mum/2018 17. Exxon Mobil Company India (P) Ltd. (2018) 92 taxmann.com 5 18. Raymond Ltd. vs. DCIT (86 ITD 791) 19. National Organic Chemical Industries Ltd. vs. DCIT (2004) (96 TTJ 765) 20. NTT Asia Pacific Holdings Pte Ltd. vs. ACIT (ITA No.1212/Mum/2021) 21. Endemol India Private Limited (264 CTR 117) 22. Trigo SAS vs. DCIT (TS-855-ITAT-2021 (PUN)) 23. GRI Renewable Industries S.L. vs. ACIT(IT) (ITA No. 202/PUN/2021) 6. Strongly relying upon the observations of the Departmental Authorities learned Departmental Representative submitted that the services rendered by the assessee under the MSA cannot be regarded as simply in the nature of managerial services. Drawing our attention to various ....
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....nt of the right, property or information for which a payment described in paragraph 3(a) of the article is received; or b) ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of the Article is received; or c) make available technical knowledge, experience, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. While the Assessing Officer has treated the services rendered by the assessee to be in the nature of consultancy services, learned Commissioner (Appeals) has partly accepted assessee's claim by attributing 50%of the amount received to FTS. 10. At this stage, we have to examine the scope of services performed under the MSA. On going through a copy of the agreement placed at page 130 of the Paper Book it is observed that the assessee provides management support services to the Indian subsidiary. Paragraph 1 of the agreement provides that the assessee shall provide assistance to the Indian subsidiary in administration, management, marketing and sale of company's products and services including but not limited to business planning, product management, business devel....