TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 1666
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.... technical knowledge, skills, expertise etc to the India affiliate; * judicial precedents relied upon by the appellate, inter alia, wherein similar functions were held not to 'make available' any technical knowledge, skills etc to the recipient. 2. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in making and the Hon'ble DRP has erred in confirming addition of tax deducted at source ("TDS") of Rs. 69,51,134, deducted by India affiliate while making payment of administrative support fee, on account of grossing up of such fee by not appreciating that such fee was actually paid 'gross of tax' to the appellate and the India affiliate was not liable to pay any amount over and above administrative support fee of Rs. 6,58,25,207 (inclusive of TDS of Rs. 69,51,134). 3. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in levying and Hon'ble DRP has erred in confirming levy of interest under section 234B of the Act disregarding that even if consideration is treated as FTS/FIS, interest under section 234B is not applicable on facts and in law since: * The entire income of appellate, being a no....
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.... any technical knowledge, experience, skill, etc. to the Indian affiliate. 8. After carefully considering the assessee's reply and examining the facts of the case, the definition of "Fee for Technical Services"(FTS), the Assessing Officer relied on Explanation 2 to section 9(1)(vii) of the Act and observed that the definition of FTS in Explanation 2 to section 9(1)(vii) of the Act shows that consideration paid for the rendering of any managerial, technical or consultancy service, as also the consideration paid for the provision of services of technical or other personnel, would be regarded as fees paid for "technical service". The definition excludes from its ambit consideration paid for construction, assembly, or mining or like project undertaken by the recipient, as also consideration which would constitute income of the recipient chargeable under the head "Salaries". 9. The Assessing Officer was of the view that the assessee has provided support services to its Indian affiliate, which are clearly in the nature of managerial and/or consulting services, accordingly, categorically held that the assessee's receipts constitute FTS under section 9(1)(vii) of the Act. Accordi....
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....io-Rad Laboratories (Singapore) Pte Ltd. [2023] 459 ITR 5 [Delhi)-Para 14. The ld. counsel for the assessee submitted that the agreement is effective from 1-1-2010 and the assessee is in A.Y. 2018-19 and 2019-20 and if the assessee had enabled the services recipient to apply the technology on its own, then why would the service receipt require such service year after year since 2010. In assessee's case as well the agreement was entered in 2005 and services are rendered on year-to-year basis means the make available condition is not fulfilled and not taxable on under the Act. The above ruling has been followed by Hon'ble Bombay High Court in Shell India Markets [2014] 160 Taxmann 175 (Bom) in para 23 as stated supra that in case of continuity of services means, make available is not fulfilled. The ld. counsel for the assessee relied on the ITAT- Delhi in the case of Invesco Holding Company (US) Inc [2024] 165 Taxmann 330 [Delhi] which followed the Bio- Rad. Reliance was also placed on the Hon'ble Delhi High Court in the case of International Management Group (UK) Ltd. v CIT [2024] 466 ITR 514 (Delhi). 15. The ld. counsel for the assessee emphasized that Administrative s....
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....re of services rendered and, therefore, the matter was remitted back to the Assessing Officer. 18. The ld. DR further distinguished the reliance placed by the ld. counsel for the assessee on the decision of the Hon'ble Jurisdictional High Court of Delhi in the case of Steria India Ltd 386 ITR 390 by arguing that the services rendered in the case of Steria India Ltd is distinguishable with the services rendered in the case of the Assessing Officer. The ld. DR continued by saying that in the case of the assessee, the services rendered are in the nature of technical and consultancy and not managerial. Further, the ld. DR submitted that in the case of Steria India Ltd, the issue was nature of services in context with India-France DTAA where no "make available" clause existed. However, the ruling in the case of Steria Limited [supra] is pari materia with the India-USA treaty. The ld. DR further pointed out that the issue on FMN has been decided against the assessee in the case of Nestle and therefore, reliance placed on the case of Steria would not be of any help to the assessee. 19. We have heard the rival submissions and have perused the relevant material on record. We find that....