9911796707
TMI Blog2014 (1) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... e to Steve Matheson UK, for providing market awareness and development training to its employees. The assessment year involved is 2008-09 and the impugned passed by the learned Commissioner (Appeals), in the matter of tax withholding demands raised under section 201 r.w.s. 195 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for the assessment year 2008-09, is dated 4th February 2009. 2. There is no dispute that the payments were made by the assessee for certain training services provided to the employees of the assessee company. The training was in the nature of "in house training of IT staff and medical staff" and of "market awareness and development training". There is also no dispute that in terms of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e search engine for meaning of the expression 'make available' and it was emphasized that the same meaning be applied in the present context as well. On this basis, the Assessing Officer concluded that the training fees paid by the assessee is taxable in India under Article 13(4)(b) of India UK DTAA. Accordingly, the Assessing Officer raised demands under section 201 r.w.s. 195 of the Act. Aggrieved, assessee carried the matter in appeal before the learned CIT(A). Learned CIT(A), in his rather brief, referred to the wordings of Article 13(4)(b), stated that this deals only with technical and consultancy services which "are ancillary and subsidiary to the enjoyment of the property" referred to in Article 13(3)(b) - something which is clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdictional High Court or by Hon'ble Supreme Court. We, therefore, hold that unless there is a transfer of technology involved in technical services extended by the UK based company, the 'make available' clause is not satisfied and, accordingly, the consideration for such services cannot be taxed under Article 13(4)(c) of India UK tax treaty. No doubt, as pointed out by the learned Assessing Officer, there can indeed be situations in which technical training is imparted resulting in transfer of technology, even consideration for rendering of training services will be covered by the definition of 'fees for technical services' but what is really the decisive factor is not the fact of training services per se but the training services being of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the provisions of the Income Tax Act apply in a treaty situation only to the extent they are more favourable, vis-à-vis the provisions of tax treaties, to the assessee. Accordingly, when case of the revenue authorities fails on the tests of the treaty provisions, there is no occasion at all for their leaning upon the provisions of the Income Tax Act. The case of the revenue authorities, as discussed above, does not succeed on the provisions of the tax treaty as there is nothing to establish, or even indicate, that there is any transfer of technology in the present case. In view of these discussions as also bearing in mind entirety of the case, in our considered view, the fees for training services of general nature, which does no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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