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TMI Blog2016 (8) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. The impugned payments do not constitute FTS in the hands of the assessee and fall within the ambit ‘Business Profits’ and since assessee do not have any PE in India, the same are not taxable as per statutory provisions / Treaty. - ITA No.5406/Mum/2014, ITA No.5407/Mum/2014 - - - Dated:- 8-8-2016 - Shri Mahavir Singh, JM And Shri Manoj Kumar Aggarwal, AM Revenue by . . Shri Jasbir Chauhan (CIT DR) Assessee by . . Shri Porus Kaka and Divesh Chawla ORDER Manoj Kumar Aggarwal (AM) : The above set of two appeals have been filed by separate assesses against separate impugned orders both relating to the Assessment Year [AY] 2011-12. The sole issue raised in both the appeals is with regard to the taxability / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and taxability of these services. These services are referred to as the Loaned / Borrowed services. It has been stated that all the services have been performed outside India in the ordinary course of business and hence these constitute business receipt and since assessee has no PE in India, the same are not taxable in India in view of Treaty provisions. Therefore, the assessee claimed the same as exempt in Return of Income in view of beneficial provisions of Double Taxation Avoidance Agreement [DTAA, in short Treaty ] between India and USA. The AO relying on the revenue s stand in the same matter in earlier years in assessee s own case, treated the same to be in the nature of Fees for Technical Services [FTS] within the meaning of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d services under Para 4(b) of Article 12 of the treaty. The assessee supplies data only and do not make available any technical knowledge, skill and expertise to Mckinsey India. In support, the AR relied upon various judicial pronouncements including various orders of ITAT in his favour for difference assessment years. He further contended that this issue of taxability has been settled in favour of the assessee by way of agreement reached by competent authorities of India and USA under Mutual Agreement Procedure (MAP) for AY 2007-08, 2008-09 2009-2010 and the same principle / approach should be applied to the present issue in hand for Assessment Year 2010-2011. The learned representative (DR) for revenue on the other hand has relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been consistently holding that the services rendered by the assessee do not fall within the ambit of FTS as defined in Article 12 (4) of Indo-US treaty DTAA. These orders have been followed in the subsequent year in assessment year 2009- 10 by the Tribunal vide order dated 17th April, 2015 a copy of which have been filed in the paper book pages 1 to 9. Accordingly, respectfully following the judicial precedents and also the fact that in the present case, the issue has been settled under the MAP proceedings, we hold that the services rendered by the assessee are not taxable in India under Article 12 and also it is an admitted fact that the assessee do not have any PE in India and therefore the same are not taxable under the treaty. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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