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TMI Blog2009 (11) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... hout recourse to service provider - services rendered by WNS, UK, did not meet aforesaid test, Commissioner (Appeals) was justified in holding that impugned receipts could not be taxed as fees for technical services - IT APPEAL NOS. 5451 AND 5452 (MUM.) OF 2005 - - - Dated:- 25-11-2009 - PRAMOD KUMAR AND R.S. PADVEKAR, JJ. S.K. Mahapatra for the Appellant. Percy Pardiwalla for the Respondent. ORDER Pramod Kumar, Accountant Member. - The assessee, by way of these appeals, has called into question correctness of order dated 26-5-2005, passed by the ld. CIT(A)-XXXI, Mumbai, in the matter of ascertainment of tax under section 195 of the Income-tax Act, 1961 (for short "the Act"), on the following grounds : "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing to establish that the assessee is having service PE of WNS-UK under Article 5(2)( k ) of India-UK Treaty; 2. On the facts and in the circumstances of the case and in law, ld. CIT(A) erred in directing the Assessing Officer to consider TDS on payments for marketing and management service payable by the assessee to WNS-UK by treating as covered by Artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WNS India s services and to assist the sales staff; 4.4discuss and negotiate business proposals and contracts (or re-negotiate the same, as the case may be) on the basis of inputs received from WNS India and its own industry experience, but not conclude any contract until the receipt of prior written authorisation from WNS India; 4.5enter into contracts with clients (or re-enter into new contracts with the said clients) in the name of WNS, U.K. and without disclosing that WNS, UK is acting on behalf of WNS India. However, WNS, UK may intimate to the client that it is acting for an undisclosed principal or a disclosed principal, as the case may be, only if the same is so required to be intimated to the client under any law or regulation applicable in the territory; 4.6perform administrative, sales support and account handling services to WNS India including, but not limited to : order processing, customer credit review, invoicing and account receivable processing/collection (for onward remittance to WNS India); providing technical input in a sales pursuit with regard to the systems that the client and WNS India use, providing assistance in project scoping; facilitating co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer as well as the contentions of the appellant. The Assessing Officer is of the view that the services rendered by WNS, UK to the appellant are in the nature of technical/consultancy services which make available technical knowledge, skill, experience, etc., as provided in Article 13(4)( c ) of the India-UK treaty and the income receivable for such service in taxable as FTS. Accordingly, the remittance for these services is chargeable to tax at the rate of 15 per cent. The appellant has contended that the services that are "managerial" in nature should be outside the scope of the definition of "technical" and "consultancy". Accordingly, the services provided by WNS, UK to the appellant should not be considered as technical services. For this, the appellant has placed reliance on the ruling of AAR, which has recognized the distinction between "managerial services" and "technical and consultancy services" in the context of the India- US treaty (P. No. 28 of 1999), In re [2000] 242 ITR 208 (AAR). Further, the appellant has contended that the services provided to the appellant by WNS, UK does not "make available to the appellant any knowledge, experience or skill, etc." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and apply the same as arrived at after such examination and verification." 6. The Assessing Officer is aggrieved by the directions so given by the ld. CIT(A) and is in appeal before us. 7. Having heard the rival contentions and being perused the material on record, we see no reason to interfere in the conclusion arrived at by the ld. CIT(A). As Shri Pardiwalla, rightly pointed out the scope of events for technical services under article 12 of Indo-U.K. Tax Treaty is confined to payment of any kind to any person in consideration for making available technical knowledge, etc. Generally speaking, technical services are treated as having been made available when recipient of such technical services is enabled to perform such services without recourse to the service provider. As to what are the connotations of "make available", a reference may be made to the decision of this Tribunal in the case of Raymond Ltd. v. Dy. CIT [2003] 86 ITD 791 (Mum.). In the said case, a co-ordinate Bench has made following observations with which we are in most respectful agreement and which aptly sum up the prevailing legal position in this regard : "We hold that the word "which" occurri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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