TaxTMI 
TaxTMI 
2025 (11) TMI 744
X X X X Extracts X X X X
X X X X Extracts X X X X
....erting raw data into e-form. The Assessing Officer has treated the said receipts as Fee for Technical Services (in short 'FTS') within the meaning of Article 13 of India UK DTAA and thus made addition of entire receipts. She submitted that identical addition was made by the Assessing Officer in hands of the assessee in AYs 2016-17 and 2017-18. The assessee carried the issue in appeal before the Tribunal in ITA No.2237 and 2238/Del/2024 for Assessment Years 2016-17 and 2017-18. The Tribunal vide common order dated 18.12.2024 dismissed appeal of the assessee. Thereafter, the assessee carried the issue further in appeal before the Hon'ble Delhi High Court in ITA Nos.92 and 93/2025. The Hon'ble High Court vide judgment dated 14.07.2025 decided the issue in favour of the assessee by holding that 'make available' condition is not satisfied therefore, the receipts does not fall with the meaning of FTS as defined in Article 13(4) of India-UK DTAA. The ld. Counsel contended that the facts in AY 2017-18 are identical to impugned assessment year. To substantiate that the issue and facts involved in the present appeal are identical to AY 2017-18, the ld. Counsel placed on record a copy of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Article 13(4)(c) of India UK DTAA. From perusal of the impugned assessment order, we find that the assessment order for AY 2018-19 is verbatim of draft assessment order for AY 2017-18. So much so that in para 2 of the impugned assessment order, the ld. AR has not even bother to change the assessment year and has mentioned AY 2017-18 instead of 2018-19. Except for the receipt amounts, there is no change in the findings of the Assessing Officer in the impugned assessment year. Thus, this makes it clear that the factual and legal matrix in the impugned assessment year is identical to AY 2017-18. The Revenue has also not disputed this fact. 7. In Assessment Year 2017-18, the assessee carried the issue before the Tribunal but remained unsuccessful. The assessee carried the issue in further appeal before the Hon'ble Delhi High Court in ITA No.92 and 93/Del/2025 (Supra). The substantial question of law which was considered by the Hon'ble High Court for examination was: "Whether the amounts received by the Assessee from GIPL/Genpact India Pvt. Ltd. can be construed as an FTS under Article 13 of the India-UK DTAA." 7.1. The Hon'ble High Court after examining facts of the cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....makes available the technical skill and knowhow to GIPL. He contended that Paragraph 2.3 of the MPA expressly grants right to the 'Partner (GIPL)' and, therefore, there is a transfer of rights. 53. We find no merit in the said contention. A plain reading of Paragraph 2.3 of the MPA indicates that the license granted by the Assessee is to use "OB-10 services". The Paragraph 2.3 does not indicate any transfer of intellectual property right or technology, but only a license to use the services rendered by the Assessee. 54. Mr Aggarwal's contention that in terms of Articles 5B and 5A, the Assessee provides training to the employees of GIPL and the same would amount to making available technical skill and knowhow to GIPL, is also unmerited. 55. In terms Paragraph 5.6 of the MPA, OB10 is obligated to "provide training to full time employee of the Partner to enable them to promote and use the OB10 Services". The training contemplated is only for the purpose of using the platform and software in terms of the license granted by the Assessee. The training is not for imparting technical knowhow or knowledge which is involved in rendering the services. As noted above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f certain products referred to in the relevant agreement and the said decision as 'SFDC products'. This Court had rejected that the training imparted in the context of the said products would render the remittance made by the Indian entity chargeable to tax as FTS. In the given facts, the Court had observed: "41. The technical assistance and training imparted to SFDC India staff appears to be aimed at enabling them to understand the various attributes and capabilities of SFDC Products so as to be informed when interacting with prospective customers in the territory. The technical assistance and training which is spoken of in Section 4.3 of the Reseller Agreement does not appear to bear the characteristics of a conferral of specialised or exclusive technical service. In any case, the training and assistance proffered by SFDC was a concomitant to the sale of its principal products in the territory and fundamentally aimed at readying SFDC India to undertake the marketing of those products. The technical assistance and training did not constitute either the core or the foundational basis of the consideration which was received by SFDC Ireland. 42. Insofar as the products for S....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... essential for the consideration to be construed as FTS under Clause (c) of Paragraph 4 of Article 13of the India-UK DTAA. 61. In the facts of the present case, the training imparted to GIPL's employees for using the software or e-platform, does not transmit the technical knowhow or the process for rendering the services of generating electronic invoicing. The said service is performed by the Assessee by the use of its proprietary software and the e-platform operated by it. The training to use the said platform does not transfer the knowledge or transfer the technology, which would enable GIPL to absorb the technology to generate e-invoices and render the subject services on its own. GIPL does not acquire any rights in the Assessee's proprietary software. 62. In view of the above, the question whether the payments received by the Assessee for rendering the services constitute FTS within the meaning of Paragraph 4 of Article 13 of the India-UK DTAA, is answered in the negative. Thus, the said receipts are not chargeable to tax under the Act. In this view, it is not necessary to examine whether such receipts constitute FTS within the meaning of Explanation 2 to Sect....