TaxTMI 
TaxTMI 
2025 (4) TMI 477
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....ling beyond and taking a decision in direct valuation of order of this tribunal dated 26.07.2024 supra. The Ld. Counsel for the assessee submitted that this is the second round of litigation in this case. It has been submitted that in the first round of litigation, PCIT had, for AY-2015-16, exercised its revisionary powers u/s 263 vide its order dated 30.03.2021 the matter travelled to this tribunal which passed order in ITA No.434/Chny/2021 dated 21/02/2022, whereby the impugned order dated 30.03.2021 was set aside to the PCIT for readjudication. The PCIT then proceeded to pass another revisionary powers u/s 263 vide its order dated 06.01.2023 directing the Ld. AO "...that the assessment may be framed after examining the character and taxability of all the receipts w.r.t. article-12 and 23 of India - USA DTAA, after giving fresh opportunity to the assessee...". The Ld. Counsel submitted that meanwhile this tribunal passed a common order dated 26.07.2024 in ITA Nos.259, 260, 261 and 262 / Chny/ 2023 for AYs-2014-15, 2015-16, 2016-17 & 2017-18. It was submitted that through ITA Nos.260/Chny/ 2023 for AYs-2015-16 the second revisionary order u/s 263 dated 06.01.2023 was challenged. ....
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....der passed by the Commissioner of Income Tax u/s 263 of the Act dated 06.01.2023 and hence the subject draft assessment order passed has become infructuous. However, it is pertinent to refer to the subject para of the Hon'ble Tribunals's order wherein ITA No.260/Chny/2023 relating to AY-2015-16 has been addressed. The relevant para (par number 12) is reproduced hereunder: "12. As regards to appeal for assessment year 2015-16, which is an appeal against revision order passed by the PCIT u/s. 263 of the Act in ITA No.260/Chny/2023 for the assessment year 2015-16, the issue on merits is exactly identical as we have deal with in ITA No.659/Chny/2023 for the assessment year 2014-15 above. Hence, taking a consistent view, we adopt the decision of assessment year 2014-15 and accordingly delete the addition". 4.1 Herein, it can be clearly noted that the Hon'ble Tribunal has not determined the validity of the order u/s 263. The CIT had established in his order dated 06.01.2023 that the AO's order was erroneous and prejudicial to the revenue to the extent that the necessary enquiries were not conducted and taxability of the subject receipt was not duly examined by the AO in....
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.... issue by the grounds of appeal no.3 & 3.1 stating that even on the merits of the case the addition of Rs. 30,26,13,530/- made by the Ld. AO as fees for included services u/s 9(1)(vii) of the act r.w. article 12(4) of India USA DTAA is not maintainable. In support of its claim the assessee has placed reliance upon the order of Hon'ble Coordinate Bench of this tribunal in assessee's own case passed vide common order dated 26.07.2024 in ITA Nos.259, 261 and 262 / Chny/ 2023 for AYs-2014-15, 2016-17 & 2017-18. The Ld. Counsel submitted that addition on identical lines was made by the Revenue in the impugned years which was deleted by the Hon'ble Tribunal. In support of its claims the Ld. Counsel invited our attention to para 7 to 10.4 of the said order on pages 13 to 22 extracted herein below. The Ld. Counsel for the assessee submitted that the facts of the present case are identical to those existing in AY-2014-15 to AY-2017-18:- Extract 7 to 10.4 pages 13 to 22 ".....7. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the AO while passing draft assessment order u/s. 144C of the Act, proposed addition on account of receip....
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.... authority and control for access to the computer room. And, under the heads, Business Application Services, Manufacturing ITA Solutions Services, Data Management Services, End User Computing Services, Central IT Support, Security Services, Network services, Server services, Telecom Services and IT Staff Support Services, the assessee was rendered services to its clients. Except for the Security Services, Network services, Server services, Telecom Services and IT Staff Support Services, services rendered under Other heads is in the nature of Technical services and fall under the category of Fees for Technical Services under section 9(1)(vii)(b) of the IT Act, 1961 and as Fees for Included Services as per Article 12(4) of the India-US DTAA as the services rendered, as seen above, satisfied the 'make available' clause." 8. We noted that the DRP simpliciter confirmed the action of AO by observing that the assessee has not been able to demonstrate that the services rendered do not lead to 'make available' technical knowledge, experience, skill, know how or process to the assessee. Further, there is no information on what was the nature of services rendered and the information ....
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....ph 4(b). In our view, these services rendered by assessee to its sister concern and compensation received on account of the same does not fall in these typical categories mentioned in paragraph 4(b) which includes 'making technology available' nor to be taxable under Article 12 of the tax treaty as FIS, the payment should fit into the terminology 'make available' wherein the technical knowledge, skill etc., must remain with the person receiving the services even after the particular contract comes to an end. Want to back of that, in the present case there is no such clause in the service agreement which we have gone through and substantially reproduced in our order. The nature of services provided by assessee which the company merely centralizes the IT related services to achieve a standardized IT environment and payment towards access to developed standard business / engineering applications, data management by providing disaster recovery / back up services, helpdesk support services, user administration, maintenance of IT infrastructure support services, telecom services do not make available any technical knowledge, experience, skills, etc., to the recipient, since the recipient....
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....ogy may use or may not use the technology. It has no bearing on the taxability aspect is concerned. When the technical service is provided, that technical service is to be made use of by the recipient of the service in further conduct of his business. Merely because his business is dependent on the technical service which he receives from the service provider, it does not follow that he is making use of the technology which the service provider utilises for rendering technical services. The crux of the matter is after rendering of such technical services by the service provider, whether the recipient is enabled to use the technology which the service provider had used. Therefore, unless the service provider makes available his technical knowledge, experience, skill, know-how or process to the recipient of the technical service, in view of the clauses in the DTAA the liability to tax is not attracted." and finally at para 31 held as under:- "31. Therefore, the assessee's not being possessed with the technical knowhow to conduct this prospecting operations and reconnaissance operations, engaged the services of Fugro which is expert in the field. By way of technical ....
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.... the India Australia Treaty and hence, the same is not taxable in India. We also hold that the amount received by the assessee cannot be treated as a Royalty even under the normal provisions of I.T. Act. But under the normal provision of the I.T. Act the same constitute consideration for rendering the technical services covered u/s. 9(1)(vii) of the I.T.Act. Accordingly, Ground No.1 is allowed and issue is decided in favour of the assessee. 10.3 Another case cited by ld. Counsel for the assessee of ITAT, Delhi Bench in the case of GE Energy Management Services Inc., vs. ADIT reported in [2022] 135 taxmann.com 173, wherein the Delhi Tribunal noted that the assessee company entered into an agreement with the Indian company to provide off-shore maintenance and support services. As per agreement, the assessee's broad scope of work was to provide off-shore maintenance and support services from outside India and no part of services was defined under the agreement were rendered by the assessee from India. The Tribunal in these facts, held as under:- 27. From the above explanation provided in the MOU that forms an integral part of tax treaty that service only, if it makes....