2020 (1) TMI 1750

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.... 1. "Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in holding that the payment towards centralized IT support services are not taxable as Royalty? 2. Whether on the facts and circumstances of the case and in law, not taking cognisance of amended Explanations 5 & 6 to section 9(1)(vi) of the IT Act, while reaching to the conclusion that such services are not taxable as royalties? 3. Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in holding that the payment towards Business support services contribution are not taxable as fees for technical services? 4. Whether on the facts and circumstances of the case and in law, the CIT(A) has erred ....

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....ssessment order u/s 143(3) similar to A.Y. 2009-10 treating the amount received towards IT support Services as 'Royalties' as per the Act as well as Article 12 of the India-Singapore DTAA. Further, the receipts towards business support services were held to fall within the ambit of Fees for Technical Services ('FTS') both under the Act as well as Article 12 of the India-Singapore DTAA. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. DR submitted that on a perusal of the agreements and submissions before the Assessing Officer by the assessee clearly set out that the nature of services under the IT Agreement relates to centralized d....

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....that the Assessing Officer has rightly made additions as the payments towards IT support services and business support services are taxable under the Income Tax Act, which was totally ignored by the CIT(A). 6. The Ld. AR submitted that the assessee received payments from its Indian Group Companies i.e. IT related services FCI OEN Connectors Limited and FCI Technology Services Limited vide an agreement dated 01.01.2007. The Ld. AR further submitted that these services include for rendering standardized IT related services such as centralized data centre, Wide Area Network (WAN) bandwidth management, disaster recovery management, backup storage services etc. to the Indian Companies. The Ld. AR further submitted that while Indian Companies ....

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.... cost reimbursement. The Ld. AR submitted that IT Support services would not constitute FTS as such services do not enable Indian Companies to apply the technical knowledge independently. Hence, the make available clause is not specified and such services are not taxable in India as FTS. As regards Ground No.3, the Ld. AR submitted that payments made to assessee are for rendering common services towards purchasing, communications and international relationship matters, legal and insurance support etc to Indian Group companies. FCI Group has intended to centralized these services in Singapore to avoid costs involved in creating the infrastructure and knowledge base required for the services in India. The Indian Companies are not enabled to p....