TaxTMI 
TaxTMI 
2026 (7) TMI 346
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....in the additional ground, would become academic. 3. Ld. Departmental Representative ('ld. DR' for short) agreed with the aforesaid submissions of the assessee. 4. In ground no. 1, the short controversy is with regard to tax abaility of Rs. 42,16,596/- as Fees for Technical Services ('FTS' for short) u/s.9(1)(vii) of the Act and Article 12(4)(b) of India-Singapore Double Taxation Avoidance Agreement ('DTAA' for short).. 5. Briefly, the facts are, the assessee is a non-resident corporate entity, incorporated in Singapore and a tax resident of Singapore. The assessee had entered into an agreement with its Indian subsidiary, Tech Data Advanced Private Limited ('TD India'; formerly known as Tech Data Advanced Solutions (India) Private Limited) for providing management/business support services. The fee received by the assessee from the provision of such services was treated as 'business receipt' and, in absence of a permanent establishment (PE) in India, was not offered to tax. 6. In the course of assessment proceedings, the Assessing Officer (AO), while examining the nature of receipt, was of the view that the services in connection with fee was received are in the nature o....
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....ing Officer, assessee claimed that the services rendered not being in the nature of managerial, technical or consultancy services, the fee received from providing such services would not qualify as FTS under Article 12(4) of the Treaty. Without prejudice, it was submitted by the assessee that even assuming that any of the services come within the ambit of managerial, technical or consultancy services, however, in terms with Article 12(4)(b) of the Act, the fee received from services cannot be regarded as FTS, as in course of rendition of the services, the assessee had not made available any technical knowledge, know-how, knowledge, skill, experience, etc. to the service recipient enabling him to independently apply them, without the aid and assistance of the assessee. The Assessing Officer, however, was not convinced with the submissions of the assessee. He was of the view that part of the services performed come within the ambit of consultancy, whereas the other part would come within the ambit of managerial services. Having held so, he held that so far as managerial services are concerned, there is no need for fulfilment of make available condition as it only applies in case of t....
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....randing, business strategies, treasury, human resources etc. The assessee explained that all the resources undertaken as referred above were either support services, coordination or tax services without transfer of any technology skill to the recipient. With the assistance of ld. representative we have perused the decision of ITAT in the case of the assessee vide ITA No. 2367/Mum/2022 dated 21.08.2023 as referred above wherein identical issue on similar fact has been adjudicated in favour of the assessee. The relevant extract of the decision of the coordinate bench is reproduced as under: "8. In ground No.3 of appeal, the assessee has assailed assessment order in treating management/services fee received by the assessee as FTS under the Act r.w. Article-12 of India-Singapore, DTAA. The assessee has drawn our attention to the Service Agreement at pages 23 to 29 of the paper book. The assessee has received management fee under the said Service Agreement. The nature of services rendered by the assessee are specified in Schedule-A to the aforesaid agreement. The gist of services provided by the assessee in different areas as detailed in Schedule -A is as under:- * Str....
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....sting of the development and transfer of a technical plan or technical design. The prerequisite for invoking Clause-4 of Article-12 of the DTAA is that either there should be transfer of some technical knowhow i.e. make available condition is satisfied or there should be development and transfer of technical plan or technical design. The services rendered by the assessee as per Schedule-A of the Service Agreement does not in any manner show that any technical knowhow has been made available or there is development and transfer of technical plan or technical design. The services rendered are in the nature of operational management and providing support system. The services also includes providing of training and developing strategies, etc. We find that the Assessing Officer has taken pains to segregate services rendered by the assessee under the segments technical, managerial and consultancy. However, no effort has been made by the Assessing Officer to examine whether the services rendered under the three segments fulfil the criteria so as to fall within the definition of FTS under Article-12(4) of the DTAA. In so far as the definition of FTS as defined in Section 9(vii) of the Act ....