TaxTMI 
TaxTMI 
2025 (11) TMI 94
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....se: The Company is a foreign company incorporated under the laws of Canada and during the year was engaged in the business of rendering consultancy, design and engineering services to various clients. The company submitted its TRC (Tax Residency Certificate) issued by the authority of Canada. During the course of assessment proceedings, the assessee submitted that it has project offices in India for execution of its contracts, however, during AY 2022-23, the work in respect of its contracts in India had been completed and there was no income or expenses during AY 2022-23 in relation to said project. Further, the AO noted that the assessee had received income of Rs. 1,45,86,303 with respect to GIT Infrastructure expenses from, Shawinigan Engineering India Private Limited, Linxon India-Engineering Pvt. Ltd., Linxon India Pvt. Ltd. and Kent Engineering India Pvt. Ltd. (formerly known as SNC Lavalin Engineering India Pvt. Ltd.) and the said GIT charges pertained to use of various software (Auto CAD software, Civil 3D, 3ds Max. etc.) which were procured by the assessee from the Autodesk and other third-party vendors and were given for use to its aforesaid Indian entities. Further, the A....
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....he Paper Book) are reproduced as under: "5.3 The facts and arguments being similar, the Panel rejects these objections for AY 2022-23 as well. With regard to the orders of the DRP for previous year's, assessee has submitted that the addition covered in these objections has been considered by the Hon'ble ITAT for earlier year's and similar addition has been deleted. The assessee has further submitted that no further appeal has been filed by the Department. Being a factual issue, the AO is hereby directed to verify the contention of the assessee. If no further appeal has been preferred by the Department on merits of the case against order of the Hon'ble Tribunal, then, addition proposed in these grounds of objection shall not be made. If not, then, the addition shall stand confirmed. The Panel directs accordingly." 4.1 Upon receipt of the above directions of the DRP, the AO passed the final assessment order u/s 143(3) r.w.s. 144C(13) of the Act on 23.01.2025 at the total income of Rs. 1,20,59,58,843/- out of which income of Rs. 1,45,86,303/- was taxed as FIS under the provisions of Income Tax Act, 1961 and also under the relevant provisions of India Canada....
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....FIS under the provisions of Income-tax Act and also under the relevant provision of India-Canada DTAA is erroneous, unwarranted and should be deleted. General 3. On the facts and in the circumstances of the case and in law, the Ld. AO erred in proposing to initiate penalty proceedings u/s 270A of the Act for under reporting of income. The appellant prays for leave to add, alter, rescind from, or withdraw any of the above grounds of appeal at or before the time of hearing of the appeal." 6. The Ld. Sr. DR fairly admitted that the case is covered in favour of the assessee by the order of the Co-ordinate Bench of the Tribunal for A.Y. 2021-22 in ITA No.- 3691/Del/2023, in assessee's own case, SNC Lavalin Inc. vs. ACIT (International Taxation), Circle 3(1)(2), New Delhi. 7. We have heard both the parties and perused the material available on record. The Co-ordinate Bench of the Tribunal, in the assessee's own case for A.Y. 2021- 22, as referred above in para no. 2 of this order, held that the amounts received as GIT charges is only for providing use of third-party software and is not in the nature of FIS as envisaged under Article 12(4)(b) of India-Cana....
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....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." 19. 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. The amounts received as GIT charges is only for providing use of third-party software and is not in the nature of FIS as envisaged under Article 12(4)(b) of India-Canada DTAA. 20. We have considered as to whether the receipts can be considered as royalty as....