TaxTMI 
TaxTMI 
2026 (2) TMI 1083
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....peal pertain to receipts for consultancy services provided to BAIN India at Rs. 86,80,47,511/-. Secondly, receipts on account of professional support services provided to BAIN India at Rs. 47,98,96,089/-, is also in dispute. The third controversy is regarding the receipt of subscription fee for providing excess to third parties to the NPS Prism Platform (Rs.57,45,100/-), maintained by the assessee. It is seen that the Ld. AO, following the DRP's directions, added Rs. 86,80,47,511/- on the ground that such consultancy and professional support services are ancillary or subsidiary to enjoyment of rights/information received under the royalty agreement. An addition of Rs. 47,98,96,089/- has been made on the ground that the receipts are in respect of consultancy services which are Fee for Included Services (FIS) under the India US DTAA. Regarding the issue of subscription fee received from M/s Kotak and M/s Zonka the impugned amount has been added on the reasoning that such receipts deserve to be treated as royalty income as per the Act and also as per the relevant tax treaty. 1.2 The aggrieved assessee has approached the ITAT with the following grounds of appeal: - "1. That....
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....nd in law in holding that the payment received for provision of support services under the Support Service Agreement OSSA') amounting to Rs. 47,98,96,089/- is FIS under Article 12(4)(a) of the DTAA without appreciating that these are not ancillary or subsidiary to the enjoyment of rights/information received by Bain India under the royalty agreement. 7. That the Ld. AO/DRP erred in characterizing the support services as FIS under Article 12(4)(b) of the DTAA contrary to settled position in Appellant's own case in preceding years despite there being no change in the facts and circumstances of the case. 8. That the Ld. AO/DRP erred in characterizing the support services as FIS contrary' to the finding given by Ld. CIT(A) in Bain & Company India Private Limited's case for AY 2009-10 that the professional support services provided by the Appellant are not in nature of FIS, which has attained finality in the absence of any appeal filed by the Revenue. 9. That the Ld. AO/ DRP erred on facts and in law in concluding that the support services provided by the Appellant to Bain India under the SSA are consultancy in nature. 10. That the Ld. AO/DRP erre....
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.... 12.10.2023]; AY 2020-21 [ITA 1677/Del/2023 dated 22.08.2025]. 2.1 Regarding the issue of addition of Rs. 47,98,96,089/- as consideration for support services pertaining to grounds 6 to 10 of Form 36, the Ld. AR argued that the Article 12(4)(a) of the India US DTAA was not applicable to this amount. In fact, the Ld. AR pointed out that the arguments relevant for consultancy services would apply here also. It was then pointed out that this issue is also in favour of the assessee through ITAT's order in assessee's own case for AYs 2019-20 (supra), 2020-21 (supra) and 2021-22 (supra). It was averred that the facts remain identical as compared to the earlier years and hence, the decision rendered by the ITAT would apply here also. 2.2 Regarding ground no.11 pertaining to subscription fee, it was pointed out that in the Appellant's own case for AY 2021-22 (supra), the issue has been decided in favour of the assessee and since the facts are identical to the earlier year, hence, the decision rendered by the coordinate bench of ITAT would apply here also. 2.3 The Ld. AR stated that grounds 13 & 15 are consequential in nature and do not require any specific adjudication. However, g....
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....also grant the due credit of taxes of INR 22,66,691 /- deducted on the interest income of INR 54,48,776/-." 2.4 Regarding ground no.12, the Ld. AR stated that the Ld. AO observed that since the assessee had opted for settlement under the Driect Tax Vivad se Vishwas Scheme for AYs 2011-12 to 2014-15 and AYs 2016-17 to 2017-18, the Ld AO has presumed that the issue so settled amounted to acceptance of the Revenue's stand. The Ld. AR relied on the written submissions as under: - "71. The Ld. AO while passing the assessment order, observed that since the Appellant has opted for settlement under the Direct Tax Vivad se Vishvas Scheme for AY 2011-12 to AY 2014-15, AY 2016-17 & AY 2017- 18 (in relation to payments received under CSA and reimbursement of expenses incurred for third party service providers) shows tacit acceptability of the additions by the Appellant on the above issues. 72. At the outset, it is submitted that in Appellant's own case for AY 2019-20 this Hon'ble ITAT in order dated 12 October 2023 passed in ITA No. 1620/Del/2022 has considered the objection raised by the department and negated the said argument. (refer para 20-21 of the said order on page....
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....cal or consultancy. To understand the true import of the expression of technical or consultancy, it is necessary to refer to the Memorandum of Understanding to the Tax Treaty. As per the Memorandum of Understanding, Article 12 includes only certain technical and consultancy services. Technical services would mean, services requiring expertise in a technology. Whereas, consultancy services would mean advisory services. The categories of technical and consultancy services are to some extent overlapping, because, a consultancy service could also be technical services. However, the category of consultancy services also includes an advisory service, whether or not expertise in technology is required to perform it. The nature of services provided under the agreement, such as, client engagement, market research, strategic research and planning etc., in our view, certainly, do not fall under the category of technical services. 17. Further, even assuming that they fall under the category of consultancy services, however, the most crucial condition to be satisfied to qualify as FIS under Article 12(4)(b) is the make available condition. In the facts of - the present appeal, the depa....
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....erused the relevant material on record. We find that the coordinate bench of ITAT in assessee's own case for AY 2019-20 in ITA 1620/Del/2022 dated 12.10.2023 has held that receipts on account of support services are not FIS as under: "16. On a detailed analysis of the services rendered, it appears" that some of the services rendered may not fall in the category of technical or consultancy services. However, some of the services rendered may fall either under technical or consultancy services. But the most crucial aspect, which requires examination is, whether in course of rendition of such services, the assessee has made available any technical knowledge, know-how, skill etc. to Bain India so as to enable Bain India to employ such technology, know-how, skill etc. without the aid and assistance of the assessee. In this context, it must be borne in mind that the agreement for providing support services was executed between the assessee and Bain India on 1st day of April, 2010. Whereas, the present appeal relates to assessment year 2019-20. Thus, it is patent and obvious that from the year 2010 onwards, the assessee is providing support services to Bain India on regular basis....
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.... of the considered view that in the present case, the support services rendered by the Assessee to Bain India do not make available any technical knowledge, experience, skill, know-how etc. as contemplated under the DTAA and that the amount received for provision of support services rendered by the Assessee to Bain India cannot be treated as FIS under Article 12(4)(b) of the DTAA. Accordingly, we direct the AO to delete the addition. Ground 16 to 19 is allowed." Respectfully following the order of ITAT extracted above and since the facts have not changed for the present year, we hold that the amount of Rs. 47,98,96,089/- cannot be added as has been done by the Ld. AO. 4.2 Regarding the issue of subscription fee, we find that this issue is also covered in favour of the assessee by the ITAT's order in assessee's own case for AY 2021-22 (supra) as under: - "30. We are inclined to agree with the assessee that the decision of Hon'ble Delhi High Court in CIT Vs. Relx Inc. supports the case of the assessee wherein it was held as under: "11. We find that similar would be the position which would obtain when subscription fee is examined n the anvil of article 12 of t....