TaxTMI 
TaxTMI 
2026 (5) TMI 306
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....iled for A.Y. 2022-23. The case was selected for scrutiny under CASS and notice u/s 143(2) of the Income Tax Act, 1961 dated 31.05.2023 was issued to the assessee. Subsequently, notices u/s 142(1) of the Act dated 11.08.2023 and a Show-cause was issued on 01.03.2024 were issued along with questionnaire. In response to the notices/questionnaire, submissions were filed by the assessee time to time and the required details/submissions were furnished which have been examined and placed on record. 2. Myntra Inc. is a foreign company incorporated in the United States of America ('USA').During the captioned AY, the Company had rendered manpower support services to Flipkart Internet Private Limited ('Flipkart Internet'), for which Flipkart Internet has paid consideration to Myntra Inc. These manpower support services were provided by the Company from USA. 3. During the course of assessment proceedings, the assessee received an amount of Rs. 41,00,42,414/- for rendering manpower support services to Flipkart Internet Private Limited. The assessee company has claimed the said consideration received from Flipkart Internet Services as exempt from taxation under....
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.... the previous year i.e. AY 2021-22. The DRP in its order for AY 2021-22 had passed a detailed, emphatic and speaking order with respect to the issue involved. As the factual matrix continues to be the same for AY 2022-23, therefore, the basis for directions to be issued for AY 2022-23, shall be the directions already issued." 4. In pursuance of the directions of the DRP, Ld. Assessing Officer vide impugned order has made addition of Rs. 41,00,42,414/- as proposed in the draft assessment order. 5. Aggrieved by the impugned assessment order, the assessee is in appeal before us and raised following grounds of appeal: "1. That on the facts and circumstances of the case, the Final Assessment Order dated 21.01.2025 ("Impugned Order") passed 1 under Section 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 ('Act') is barred by limitation having been passed beyond the time period specified under Section 153 of the Act. 2. That, in the facts and circumstances of the case and in law, the AO erred in making an addition of Rs. 41,00,42,414/- to the returned income of by wrongly holding that the receipts from Flipkart Internet Private Limited ("Flipkart") on acc....
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....for the preceding year. It is further argued that the addition made for the preceding year A.Y. 2021-22 has been deleted by the Ld. Jurisdictional Tribunal in ITA No. 3770/Del/2023 for A.Y. 2021-22 vide order dated 10.12.2025 wherein the Ld. Tribunal has held that the receipts from Flipkart towards manpower support services do not constitute fees for technical services (FTS) either under section 9(1)(vii) of the Act or under Article 12(4) of the India-US DTAA. It is therefore, argued that the present case of AY 2022-23 is covered by the said judgment and the addition made in this year needs to be deleted accordingly. The Ld. AR has relied the relevant portion of order in ITA No. 3770/Del/2023 (supra) in its own case particularly para no. 9 to 12 of the said order. It is therefore, submitted that since the facts and circumstances of the year under appeal remained identical to those examined by this Tribunal for A.Y. 2021-22 and no distinguishing feature has been brought on record by the AO or the DRP, therefore, respectfully following the principal of jurisdictional consistency and the binding decision of the jurisdictional Tribunal in appellant's own case for preceding AY 2021-22, ....
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.... detailed above nowhere reflects transfer of any knowhow, technical skill, technical knowledge or process or transfer of any technical plan or design so as to satisfy 'make available' condition in Article 12(4)(b) of India-US DTAA. According to the AO 'make available' condition is satisfied as the assessee facilitates to collaborate with academic institution in US. The understanding of the AO with respect to 'make available' condition is erroneous. There is no finding by the AO or the DRP that the assessee is transferring any technology/knowhow, skill/experience or process or in any manner transfer technical plan or technical design so as to constitute any services for which payments fall within the meaning of FTS. The India-US DTAA Article 12(4) defines Fee for Included Services (FIS). The same reads as under:- "4. For purposes of this Article, "fees for included services" means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right, pro....
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....rces our view that the make available condition would be satisfied only if the rendering of service involves a clear and demonstrable transfer of technical skills, expertise or knowhow to the recipient. It must involve a transfer of capabilities and not just the temporary use of the provider's knowledge, expertise or skill. 94. This leads us to the definitive conclusion that the rendering of technical and consultancy services has to be read alongside and in conjunction with "make available" as that phrase appears in the aforesaid paragraph. On a plain textual reading of Article 13 it becomes apparent that both the rendering of service and the skill, knowledge and expertise being made available are conditions which must be concurrently and cumulatively satisfied. What we seek to emphasize is that Article 13 in unambiguous terms creates an enduring, unfading and imperishable link between the furnishing of service and a transmission or conferment of technical expertise, knowledge and skill. 95. It is also important to bear in mind that the mere usage or utilisation of technical or consultative material in aid of business would not be sufficient to attract Article....