TaxTMI 
TaxTMI 
2023 (11) TMI 1443
X X X X Extracts X X X X
X X X X Extracts X X X X
....directions of learned Dispute Resolution Panel (DRP). 2. The dispute in the present appeal is confined to taxability of an amount of Rs. 13,19,87,042/- as Fees for Technical Services (FTS) under Article 12(4) of India - Singapore Double Taxation Avoidance Agreement (DTAA). 3. Briefly, the facts are, the assessee is a non-resident corporate entity incorporated in Singapore and a tax resident of Singapore. As stated by the Assessing Officer, the assessee is engaged in the business of manufacturing and distribution of electronic products. In the assessment year under dispute, the assessee had earned certain receipts from India, including an amount of Rs. 13,19,87,042/- on account of provision of management services. In the retu....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Upon going through the nature of services provided under the management service agreement, the Assessing Officer observed that the services rendered are of managerial and technical nature, hence, are of the character of FTS. He further observed that while rendering such services, the assessee has made available technical knowledge, experience, skill, know-how etc. to the service recipient. Thus, he held that the amount of Rs. 13,19,87,042 to be treated as FTS, both under the provisions of the Act as well as under India - Singapore DTAA. Accordingly, he proposed the draft assessment order. 6. Against the draft assessment order so proposed, the assessee raised objections before learned DRP. While considering the objections of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder the Act as well as under the treaty provisions, however, learned first appellate authority deleted the additions. He submitted, Revenue's appeals against the decision of the first appellate authority was dismissed by the Tribunal. He submitted, though, the agreement, under which services have been rendered in the impugned assessment year was executed on 1st January, 2014, however, the terms of the agreement and services rendered therein essentially remain identical to assessment years 2009-10 and 2010-11. 8. To demonstrate such facts, learned counsel furnished the following facts in a tabular format to establish parity in the nature of services under both the agreements: Particulars Previous services agreement (relevant for AY....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces Remuneration Cost plus mark-up of 5% Cost plus mark-up of 5% - All services, advises and information provided under this agreement must not be disclosed or made available to third parties without the prior approval of FCI Asia - All information provided under this agreement is for the exclusive use of the Parties - Each party undertakes Confidentiality - Each party undertakes to maintain the confidentiality - The confidentiality obligation shall be valid for the entire duration of this agreement and shall survive the expiration or cancellation of this agreement for a period of three years. - Initial term of one year from the date of agreement - The confidentiality obligation shall be valid for the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le 12(4)(a) of the treaty. Proceeding further, he submitted, since, the make available condition is not fulfilled, the receipts would not fall under Article 12(4)(b) of the treaty. 11. Learned Departmental Representative strongly relied upon the observations of learned DRP. 12. We have considered rival submissions and perused the materials on record. Facts on record reveal that the assessee has certain receipts from an Indian entity towards provision of management services provided under an agreement. Though, the assessee has claimed that the receipts are not in the nature of FTS under treaty provisions due to non-fulfillment of make available condition under Article 12(4)(b) of the treaty, however, negating assessee's claim, the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assistance and the ancillary services rendered by the assessee in connection with licensing of patents, trademarks, copyrights, know-how etc. cannot be equated with fees for management services, as both are governed under different set of agreements and have no connection with each other. Therefore, in our view, the finding of learned DRP that the fee received from management support services would qualify as FTS under Article 12(4)(a) of the tax treaty cannot be accepted. 14. Insofar as applicability of Article 12(4)(b) of the treaty is concerned, on a comparative analysis of the nature of services provided in assessment years 2009-10 and 2010-11 as well as in the impugned assessment year, as furnished before us in a tabular format repr....