2010 (6) TMI 849 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition under 'Fees for included services' u/s Article 12 of India-US Treaty for asst. year 2003-04.

Summary:
The Revenue appealed against the deletion of an addition of Rs. 5,12,12,759 under 'Fees for included services' u/s Article 12 of the India-US Treaty. The AO had treated revenue earned by Indian Branches of McKinsey & Co. as fees for included services and taxed it at 15%. However, the CIT(A) directed the AO to delete the addition based on previous ITAT decisions in the appellant's own case for various assessment years.

The CIT(A) relied on previous ITAT decisions in the appellant's own case for different assessment years and directed the AO to delete the addition. The ITAT, following the decision of the Single Member Bench in the case of McKinsey & Co. Inc. (Switzerland) Vs. ADIT, held that the payments in question cannot be treated as fees for included services under Article 12 of the India-US Treaty. The ITAT upheld the CIT(A)'s order, dismissing the Revenue's appeal.

The ITAT found no infirmity in the CIT(A)'s order, which was based on previous ITAT decisions in the appellant's own case. The Revenue's appeal was dismissed, upholding the CIT(A)'s decision to delete the addition under 'Fees for included services' u/s Article 12 of the India-US Treaty for the relevant assessment year.