2014 (2) TMI 1450

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....f expenses received by the assessee for issue of GDR/FCCB etc. from Indian companies is not taxable as fees for Technical Services under U.K. Treaty without considering the following facts. confirming the action of A.O. in disallowing Rs. 10,00,000 being sub- (i) All receipts on account of issue of GDR & FCCB are in the nature of normal fund for the issuing company and it loses its special character of having been received outside India, once the same has been received by the issuing company and the issuing company can utilize for its own purpose. (ii) The ultimate benefit of the services rendered by the ODB is ultimately with the issuing Indian Company and hence the services rendered have been ultimately been utilized in ....

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.... issue of GDR & FCCB are in the nature of normal fund for the issuing company and it loses its special character of having been received outside India, once the same has been received by the issuing company and the issuing company can utilize for its own purpose. ii. The ultimate benefit of the services rendered by the 0DB is ultimately with the issuing Indian Company and hence the services rendered have been ultimately been utilized in India and accordingly the said receipt is accruing or arising in India. iii. The services of investment banking definitely fall within the definition of Fees for Technical Services (FTS) within the meaning of Income tax Act and hence is taxable in India. iv. The 'make available' co....

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.... carried on outside India and hence there is no income for such activities which is received or deemed to be received by the assessee in India. Thus the assessee contended before the AO the income from these transactions outside India does not fall within the scope of total income u/s 5 of the Act. Since it did not accrue or arise in India alternatively the assessee contended that the said income would not be taxable as per Article 13 of Indo-UK DTAA as the activity of rendering services do not satisfy the 'make available' clause. The AO did not accept the contention of the assessee and held that the services rendered by the assessee have been utilised in India, therefore, they are taxable as fees for technical services u/s 9(1)(vii) of the....