AI Drafter 
TaxTMI 
TaxTMI 
2024 (1) TMI 266
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.... 2. The major issue, which is common in all these appeals, is relating to taxability of certain amounts received by the assessee from M/s. Bombardier Transportation India Ltd. ('BTIL'), an Indian group entity, as Fee for Technical Services ('FTS') under section 9(1)(vii) of the Income-tax Act, 1961 (in short 'the Act') as well as under Article 12(4) of India - Singapore Double Taxation Avoidance Agreement ('DTAA'). 3. Briefly the facts relating to this issue, being more or less common in all these appeals, are, the assessee is a non-resident corporate entity incorporated under the laws of Singapore and is a tax resident of Singapore. The assessee is a part of Bombardier Transportation group and is stated to be engaged in transportatio....
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....ee had earned certain receipts from BTIL in the assessment year under dispute. In the return of income filed for the assessment years under dispute, the assessee did not offer such receipts to tax, pleading that they are not in the nature of FTS under Article 12(4) of India - Singapore DTAA. Further, it was submitted by the assessee that, since, it does not have a Permanent Establishment (PE), the receipts cannot be taxed as business income. 5. The Assessing Officer, however, was not convinced with the submissions of the assessee. After examining the nature of services provided by the assessee and other details, the Assessing Officer was of the view that not only the services rendered qualify as managerial/technical/consultancy services,....
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....ubmitted, while examining identical issue in case of Bombardier Transportation Sweden, which provided similar nature of services to BTIL, the Tribunal has held that the receipts from providing such services do not qualify as FTS due to non-fulfillment of make available condition. In this context, he drew our attention to order dated 29.10.2020 passed by the Tribunal in ITA No.859/Del/2016. 7. He submitted, in case of BTIL itself, when an issue arose relating to liability to deduct tax at source on similar nature of payments made to another group entity in Canada providing identical nature of services, the Tribunal has held that since the nature of services provided do not make available any technical knowledge, know-how, skill etc. to th....
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....up has set up three different hubs, which provide services relating to specific work undertaken by BTIL in pursuance to contracts with DMRC. On a perusal of hub cost sharing agreement entered into by the assessee with the BTIL, it is observed that the services rendered are intermediary services, such as, administration (includes controlling, finance, general management, senior management, human resources, legal, contracts, performance management office, structured finance and continuous improvement), marketing and sales, bids, engineering, quality, procurement, project management, program management etc. Such services are provided and received on cost to cost basis. 11. It is observed, another group entity i.e. Bombardier Transportation ....
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....nsportation Canada were far wider in scope than the services provided by the assessee. However, on examining the facts the Tribunal having found that the make available condition has not been satisfied, treated the payments not be in the nature of FTS. 13. In the facts of the present appeal, after perusing the facts and material on record, we are convinced that the departmental authorities have failed to factually establish through cogent evidence that in course of rendition of services, the assessee has made available technical knowledge, know-how, skill etc. to BTIL so as to enable BTIL to employ/use such technical knowledge, know-how, skill etc. independently without the aid and assistance of the assessee. 14. That being the factua....