2024 (10) TMI 1758

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....as 'the Act') pertaining to assessment year 2021-22, in pursuance to directions of learned Dispute Resolution Panel (DRP). 2. Ground Nos. 1 and 2, being general grounds, do not require specific adjudication. 3. In ground Nos.3 and 4, assessee has challenged the taxability of management support services fee amounting to 17,18,39,483/- as Fee for Technical Services (FTS) under Article 13 of India-United Kingdom Double Tax Avoidance Agreement (DTAA). Whereas, in ground Nos.5 to 8, the assessee has challenged taxability of reimbursement of expenses of 1,86,75,069/- as FTS under Article 13 of India-UK DTAA. 4. Briefly, the facts are, the assessee is a non-resident corporate entity incorporated in United Kingdom (UK) and a tax resident o....

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....hment (PE) in India, they are not taxable in India. 5. The Assessing Officer, however, did not accept the contention of the assessee. While framing the draft assessment order, the Assessing Officer held that both management support services fee and reimbursement of expenses would qualify as FTS under Article 13 of India-UK DTAA. Accordingly, he framed the draft assessment order. Against the draft assessment order so framed, assessee raised objection before learned DRP. However, relying upon their directions in assessee's case in assessment year 2020-21, learned DRP agreed with the view expressed by the Assessing Officer in the draft assessment order. In terms with the directions of learned DRP, the Assessing Officer finalized the assessm....

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....e services rendered by the assessee are neither linked to royalty, nor in the nature of FTS considering make available criteria not met. The salient points are as under: ● in terms of the service agreement, assessee has provided only the routine services like human resource support, marketing and operation support etc., which are distinct from the services rendered under the license agreement; ● services rendered under the service agreement are not ancillary or subsidiary to the use of trademark/ brand name of software; and ● no material on record exists to establish that the services rendered by the assessee has resulted in transfer of technology, know how, skill to the Indian affiliate so as to....

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....e thereby enabling the Indian AE to apply the same on its own, has not been fulfilled in the instant case, hence the allegation of the AO is without any merit and is liable to be rejected. 25. In view of the above discussion, applying the principles laid down in the judicial precedents in the given scenario, we hold that consideration received for services in the nature of marketing and communications, human resource, commercial, corporate affairs and legal, finance, information technology, facilities management/ corporate development, rendered to PBIL would not be taxable as FTS in terms of the provisions of the India-UK DTAA." 8. There cannot be any dispute that the factual position in the impugned assessment year is no differ....