TaxTMI 
TaxTMI 
2024 (7) TMI 31
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....ide right to use the Hosted Services, solely for their internal business purposes; and ii. through BPO partner wherein it grants non-exclusive, non-transferable and non-sublicensable right to the BPO partner to resell the automated services to end-users in India. b. The Company also provides (i) certain implementation services to get the customer on boarded for the purpose of provision of Cloud-based services; and (ii) user trainings to enable the end-user access the Subscribed services. c. The Cloud-based service automates finance and accounting requirements of the subscribers to the services. Such services are completely automated and do not involve human intervention in the provision of such services. i. Such Cloud-based services include service products viz., Finance transformation, Reconciliation Management, Ondemand Professional and Close Process Management etc. which are standard products of the Company, the provision of which is fully automated. ii. The Software on cloud under SaaS model is a standard facility provided by the Company at a pre-defined tariff rate, on a non-exclusive basis, to its customers/end users. iii.....
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....or deployment of another standard Software product/another Software module for an existing customer and such services are not rendered throughout the period of provision of Cloud-based services. Once provision of implementation services is completed, the Hosted Services (i.e., the Cloud-based Software) are deployed for the customer which functions automatically without any human intervention. e. The Company provides on-demand recorded trainings or periodic live web- based training sessions to enable usage of Cloud-based services by the end-user customer. Such User trainings help the end-users access the Subscribed Cloud- based services and view the automated reports. Time is generally spent in explaining the end-user on how to generate reports from the Cloud-based service without a technical content therein. i. The provision of User training does not require any expertise in technology and merely involves procedural/operational training relating to use of the services. ii. The training is operational in nature and does not involve any technical knowledge relating to Software but merely trains the users on how to access the Subscribed service and view the ....
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....erable, worldwide right to use the Hosted Services, solely for their internal business purposes; and ii. through BPO partner wherein it grants non-exclusive, nontransferable and non-sublicensable right to the BPO partner to resell the automated services to end-users in India. b. The Company also provides (i) certain implementation services to get the customer onboarded for the purpose of provision of Cloudbased services; and (ii) user trainings to enable the end-user access the Subscribed services. (ii) Cloud-based services The Cloud-based services automates finance and accounting requirements of the subscribers to the services. Such services are completely automated and do not involve human intervention in the provision of such services. Such Cloud-based services include service products viz., Finance transformation, Reconciliation Management, On-demand Professional and Close Process Management etc. which are standard products of the Company, the provision of which is fully automated. The Software on cloud under SaaS model is a standard facility provided by the Company at a pre-defined tariff rate, on a nonexclusive basis, to i....
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....ncillary or incidental to the subscription to the Cloud- based services by the customers/end-users. Implementation services are utilized at the time of on-boarding of a new customer or deployment of another standard Software product/another Software module for an existing customer and such services are not rendered throughout the period of provision of Cloud-based services. Once provision of implementation services is completed, the Hosted Services (ie., the Cloud- based Software) are deployed for the customer which functions automatically without any human intervention. (iv) User Training The Company provides on-demand recorded trainings or periodic live web- based training sessions to enable usage of Cloud-based services by the end user customer. Such User trainings help the end users access the Subscribed Cloud- based services and view the automated reports. Time is generally spent in explaining the enduser on how to generate reports from the Cloud-based service without a technical content therein. The provision of User training does not require any expertise in technology and merely involves procedural/operational training relating to use of ....
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....an element as there is substitution of biological human by machine which is equipped to work like a human. (Reference is made to Para No. 2 on Page No. 15 and Para 10.3 on Page No. 23 of the Draft Order) Company's submission-The aforesaid is presumed by the Learned AD without providing any basis for stating so in the Draft Order. The fees charged is also based upon time spent by Company's personnel. Thus, it is clear that human element is also involved in the service rendered by the Company. (Reference is made to Para No. 3 on Page No. 15 of the Draft Order) Company's submission - The subscription fee towards the Software provided on cloud is not based on the time spent as there is no time spent in provision of Cloud-based services. The Software subscription fee is actually based on the number of users subscribed for and has no relation whatsoever to the time spent by the Company's personnel in provision of implementation service-relevant snapshots of the invoices raised by the Company with respect to Cloud-based services is captured below:..................... Thus, the Company humbly submits that the Learned AO has erred in concludi....
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....ftware and information on purpose of these module in regular business compliances is provided by Blackline team." "Variance Analysis refers to the Variance analysis module in the Blackline system where the Blackline team helped Cipla to implement the module integrated with SAP is analyze variances between various financial reporting parameters for comparable periods. Their services included implementation consulting testing and operational training." 4. Provisions of online training by the assessee again points to involvement of human element as well as satisfaction of Make available clause. In view of the above discussion, it is established that Human Element and Make available assessee company has used it to personnel for providing these services and has provided training to the personnel of its clients (as stated by CIPLA and seen from invoices of Infosys). Thus make available is satisfied in this case. In this case assessee has also provided consultancy services 4.3 It is also clear from the nature of service rendered by the assessee to CIPLA that at every stage there was a personnel from M/s Blackline Systems Inc involved in imparting the op....
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...., the ld. AR reiterated the arguments taken before the ld. DRP and the ld. DR supported the directions of the ld. DRP both of which are part of the order of the ld. DRP mentioned above. 12. Heard the arguments of both the parties and perused the material available on record. Similar issue has also been examined in the case of SNC Lavalin Inc. in ITA No. 3691/Del/2023 by ITAT Delhi. 13. Article 12(4) of the India-US DTAA defines Fee for Technical Services as: "For the purposes of this Article, 'fees for Technical services' means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or b) make available technical knowledge, experience, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. 14. Further, as per the above definition, FIS means payment for technical or consultancy....
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....l rightly puts it, its not simply the rendition of a technical service which is sufficient to invoke the taxability of technical services under the make available clause. Additionally, there has to be a transfer of technology in the sense that the user of service should be enabled to do the same thing next time without recourse to the service provider. The services provided by non residents did not involve any transfer of technology. It is not even the case of the Assessing Officer that the services were such that the recipient of service was enabled to perform these services on its own without any further recourse to the service provider. It is in this context that we have to examine the scope of expression 'make available'." 18. Basis the above, it can be held that the assessee do not "make available" any technical knowledge, experience, skill, know-how or processes to group companies which may enable them to apply any technology contained therein without recourse to the Appellant. 19. We have considered as to whether the receipts can be considered as royalty as per Article 12 India-US DTAA has also been examined. 20. We find that the facts of the assessee are co....