TaxTMI 
TaxTMI 
2025 (6) TMI 135
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....n with the directions passed by the Ld. Dispute Resolution Panel ("Ld. DRP") in the case of Appellant for AY 2020-21, assessing the income of the Appellant for the relevant assessment year at INR 98,58,95,110 as against the returned income of INR 67,19,060 is bad in law and liable to be quashed. Ground 1.2: That on the facts and the circumstance of the case and in law, the impugned order passed by Ld. AO/ DRP is contrary to correct reading and interpretation of relevant statutory provision and therefore, the impugned order is bad in law and liable to be set aside. Ground 1.3: That the directions dated 11 May 2023 passed by the DRP are void ab initio and non-est as the same have been issued without a valid document identification number (DIN) as well as without uploading on the income tax portal, thus, falls foul of the pre-requisitions enunciated by the CBDT Circular No. 19/2019 dated 14 August 2019 mandating generations/ allotment/ quoting of Document Identification Number on all communications/correspondence/ order by the Income Tax Department. Reliance in this regard is placed on Honorable Delhi High Court's judgement in the case of Brandix Mauritius Holdin....
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....payments covered by Article 15 of the DTAA Ground 2.5: That on the facts and circumstances of the case and in law, the Ld. AO/ DRP have completely disregarded the crucial fact that the same payments have been taxed as salary in the hands of seconded personnel. The Ld. AO/ DRP have also erred in disregarding the fact that tax on said payments has already been deducted under section 192 of the Act on the basis and footing that the same payments constitute salary income assessable in the hands of seconded personnel in India. Ground 2.6: That on the facts and circumstances of the case and in law, the Ld. A.O / DRP completely failed to appreciate that the very same amounts could not in law be subjected to tax twice, firstly in the hands of the seconded employees working in India and, secondly, again in the hands of the Appellant. Ground 2.7: That on the facts and circumstances of the case and in law, the Ld. A.O/ DRP also failed to appreciate that, similarly, the same amounts could not be subjected twice to deduction of tax at source, Grounds challenging addition on account of income from professional services governed by Article 15 of the DTAA as "Fe....
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....iate that in any event and in any view of the matter, the mere rendering of training services, as part of rendering professional services which are covered by Article 15 of the DTAA cannot possibly be considered to comply with "make available" requirement of Article 12 of the DTAA. In any event, as already stated, the Ld. AO/ DRP also failed to appreciate that this issue is irrelevant and immaterial as no income with respect to training service(s) was earned by the Appellant under the specified contract in the subject year. Ground 3.4: That on the facts and circumstances of the case and in law, the Ld. AO/DRP has erred in applying the facts of one agreement having training services as part of overall scope of work to all other independent agreements without appreciating that the services under other agreements are different and findings of one agreement cannot be applied to all agreements unanimously. Ground 3.5: Without prejudice to any of the above arguments, on the facts and circumstances of the case and in law, even assuming, without conceding, that the taxability of the services performed by EY US is not governed by Article 15 of the DTAA, the Ld. AO / DRP fa....
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....he ld counsel of the assessee at the outset stated that the ground no 1 including 1.1 and 1.2 are general in nature. The ground no 1.3 regarding DIN is not pressed. The ld AR submitted that ground no 2 and its sub grounds are covered by the decision of ITAT in assessee's own case for AY 2019-20 in ITA no 2332/Del/2022 dated 20.06.2023 and in ITA 3253/Del/2023 dated 07.08.2024 for AY 2021-22. 8. With respect to ground no 3 and its sub grounds regarding addition made by the A.O. of the amount of Rs 29,89,50,386 being the fees received by the assessee for the professional services rendered by the highly experienced professionals of the assessee, the ld AR submitted a written submission as follows: 8.1 This addition has been made by the A.O. by denying to the Appellant the benefit of Article 15 of the India-U.S.A. Double Taxation Avoidance Agreement (DTAA) which deals with taxability of fees received by a firm of individuals from performance of professional Services or other independent activities of similar nature. The A.O has held that these receipts are not in the nature of professional services and hence, these receipts were Fees for Included Services (FIS) covered by Article....
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....the receipts as FIS on the same reasons as in AY 2021-22 i.e., the persons rendering the services though highly qualified, experienced and trained, are not subject to a governing professional body. The Tribunal holding that the receipts are not FIS, described in detail the highly skilled nature of the services rendered by the persons in question and also their high qualifications and extensive training and experience. The Tribunal also has set out the provisions of section 194J of the I.T. Act which deals with Fees for Professional services. The ITAT considered the definition of "professional services" in the Explanation (a) to section 194J which specifically refers to "engineering profession' and also to "profession of technical, consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or section 194J. These activities are thus regarded by the statute as professions though they have no governing professional body. The ITAT made a specific reference to the notification dated 12/01/1977 S.O 18(E) and also the notification no 385(E) dated 4/5/2001 which include in the description of "professionals" all kin....
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....pplied for clarification and workable interpretation such as Income Tax Act 1961 and definition of professional provided in section 194J, 44AA, CBDT notifications, for the meaning of 'professionals services' be considered. 11. We have heard the rival submissions and have perused the relevant material on record. We find that as far as the ground 2 and its sub grounds regarding receipts on secondment charges being taxable as FIS, the issue is covered in favour of the assessee vide ITAT order in assessee's own case for AY 2019-20 which held as follows: "5. The only issue that survives which needs adjudication is whether cost to cost reimbursement on account of secondment of employees was Fees for Technical Services [FTS] as defined under Article 12 of the India- USA Double Tax Avoidance Agreement [DTAA) and whether the arrangement between the assessee and Indian entities constitutes the 'provision of services' by the assessee through seconded personnel. xxxxxx "29. Considering the facts of the case in totality, in light of the deputation agreement, we are of the considered view that cost to cost reimbursement on account of secondment of employees ....
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.... under- "15.2 The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants." 12.5 Notwithstanding paragraph 4, "fees for included services" does not include amounts paid : (a) *** (b)*** (c) *** (d)*** (e) to an employee of the person making the payments or to any individual or firm of individuals (other than a company) for professional services as defined in Article 15 (Independent Personal Services). We are of the opinion that definition of professional service in Article 15(2) do not provide an exhaustive definition of "professional services" but an inclusive one. The definition encompasses several categories which pertain to services which neither belong to nor are governed by any professional organization with disciplinary power and control such as scientists, literary persons, artists, teachers, engineers. We are therefore inclined to agree with the assessee that confining Article 15(2) to persons who are governed by a professional or....