2023 (12) TMI 547 - AT - Income Tax

Income taxable India - Considering management support services as Fees for Technical services - India-Singapore DTAA - HELD THAT - On perusal of the final assessment order and also DRP directions we observe that the facts in the current assessment year are identical to the facts for the assessment years 2013-14 to 2015-16. Therefore, as there is no change in the facts respectfully following the decision of the Tribunal for the assessment years 2013- 14 to 2015-16 2023 (4) TMI 1160 - ITAT DELHI we hold that the fee for management support services received from Cameron Manufacturing India Pvt. Ltd. is not in the nature of FTS - Decided in favour of assessee.

Summary

Issues involved:
The appeal challenges the final assessment order of the Assessing Officer dated 29.09.2019 u/s 143(3) read with section 144C(13) of the Income Tax Act, 1961 for the assessment year 2016-17.

Management Support Services as Fees for Technical Services:
The assessee contested the characterization of the fee for management support services provided to a company as Fees for Technical Services (FTS) u/s 9(1)(vii) of the Act and as per Article 12(4) of the India-Singapore Double Taxation Avoidance Agreement (DTAA). The Tribunal previously ruled in favor of the assessee for the assessment years 2013-14 to 2015-16, holding that such receipts are not FTS. The Tribunal analyzed the nature of services provided and concluded that the conditions of section 12(4)(b) were not met as the services did not make available technical knowledge, experience, skill, or know-how to the recipient independently. Consequently, it was held that the receipts were not in the nature of FTS. The Tribunal directed the Assessing Officer to grant credit for TDS in accordance with the law.

TDS Credit and Interest Charges:
The Assessing Officer was directed to consider granting TDS credit amounting to Rs 9,74,418. Grounds related to charging interest u/s 234B and initiating penalty proceedings u/s 271(1)(c) were deemed premature and not adjudicated at that stage.

In conclusion, the appeal was partly allowed, with the Tribunal ruling in favor of the assessee regarding the characterization of management support services fees and directing the Assessing Officer to grant TDS credit. The issues of interest charges and penalty proceedings were considered premature and not addressed at that stage.