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TMI Blog2019 (5) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ld. AO in concluding that the payment of management service fees of Rs. 95,95,363/- to Outotec Oyj would come within the purview of technical services as per Article I3(4)(c) of the Indo Finland Tax Treaty ('Tax Treaty'). 1.2 That in the facts and circumstances of the case and in law, the Ld. CIT(A) as well as Ld. AO erred in misinterpreting the make available clause as present in Article I3(4)(c) of Tax Treaty and concluding that the management services received by Appellant from Outotec Oyj would be taxable as fee for technical services ('FTS') under the Tax Treaty without providing any cogent reasons to support the same. 2.0 That in the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO in making disallowance u/s 40(a)(i) of the Act amounting to Rs. 6,89,025/- and Rs. 4,81,308/- representing payment of consultancy fees to International Project Services OY ('IPS') and Outotec Research OY ('ORY') respectively. 2.1 That in the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the Ld. AO in concluding that the payment of consultancy fees of Rs. 6,89,025 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was imported by the assessee from the India USA DTAA and so I am of view that by doing so the assessee is trying to get away with the liability under section 195 of the Income Tax Act The DTAA are country specific and 4 the Import of the meaning from DTAA treaties made with other countries is not permissible. b. Further the assessee is contention that as per provisions of section 90 (2) of the Act Outotec Oyj, international projects services OY and Outotec Research OY are allowed to take the benefit of the beneficial provisions of DTAA also does not hold good. As it is explained in the preceding paragraph that the service provided to the assessee company is falling within the purview of the definition of technical services as envisaged in Article 13 of the DTAA and as per India Finland DTAA the tax on such services would be levied @20%. c. Section 195 of the I.T Act states that any person responsible for paying any non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provision of this Act (not being income chargeable under the head "Salaries") shall, at the time of credit of such Income to the account of the payee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009-10, the appellant company entered into an agreement with Outotec Oyj. Further, Outotec Oyj has highly experienced personnel and knowledge for providing such services. 3.4 No services were rendered by Outotec Oyj to the appellant to enable the appellant to conduct such activity in future without recourse to Outotec Oyj. 3.5 For the purpose of determining the taxability of a non-resident in India, covered by a tax treaty; there are two approaches that can be adopted. The first approach is to decide whether the income of the non-resident is taxable under the provisions of the Act. If the income is found to be taxable under the provisions of the Act, then one needs to look at the provisions of the tax treaty to consider the taxability of the income under the treaty. The result which is more favourable then needs to be adopted. 3.6 Alternatively, before proceeding to consider taxability of a non-resident, covered by the provisions of a tax treaty, in terms of the provisions of the domestic tax laws of the source jurisdiction, it may be useful to first check whether source jurisdiction has a right to tax that income at all. In case such right is so established then one can p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individuals for independent personnel services mentioned in Articles 15, in consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical or other personnel." (Emphasis Supplied) Vide Notification No. G.S.R. 495(E), dated 13th August, 1998, reported in 233 ITR 84 (St) For the purposes of paragraph 2, and subject to paragraph 5, the term "fees for technical services means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including the provision of services of technical or other personnel) which: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in sub-paragraph (a) of paragraph 3 is received; or (b) are ancillary and subsidiary to the enjoyment of the property for which a payment described in sub-paragraph (b) of paragraph 3 is received; or (c) make available technical knowledge, experience, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. ........................................" Vide Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that they adopt the standard procedures with the object of achieving global standardization for the group as a whole and hence these services fall outside the scope of the definition of FTS provide under the India- Finland DTAA since the word managerial has been specifically excluded from the said definition. 4.4 The appellant would also like to bring to your goodselfs attention that it was the intent of the countries to specifically exclude "managerial services" from the purview of the definition of FTS in the India-Finland Treaty. It is pertinent to note that wherever the intention of the countries has been to use the term "managerial" the same has been explicitly used in the respective DTAAs, for instance, the India-France DTAA or the India-Singapore DTAA. A copy of the extract of the India-France DTAA and India-Singapore DTAA where the term "managerial" has been specifically used has been reproduced below for your ready reference:- India-France DTAA "ARTICLE 13 - Royalties and fees for technical services and payments for the use of equipment - 1. Royalties, fees for technical services and payments for the use of equipment arising in a Contracting State and paid to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than those mentioned in Articles 14 and 15 of this Agreement as consideration for managerial or technical or consultancy services, including the provision of services of technical or other personnel." (Emphasis Supplied) 4.6 In this regard, we would like to draw support from the ruling given by Hon'ble AAR in the matter of Invensys Systems Inc. Vs DIT [183 Taxman 81 (AAR)] wherein AAR on a substantially similar set of facts have held that the services do not qualify as 'technical' services since the same are 'managerial' in nature. The relevant extracts of the Ruling are reproduced here-under: "8. On an analysis of the nature of functions that are enumerated in the Agreement, it is fairly dear that many or most, of them are managerial in nature. The learned Counsel for the applicant has drawn our attention to the dictionary meanings of the word 'manage'. In Intertek Services, In re (2008) 307 ITR 418 this Authority observed: "First, about the connotation of the term "managerial". The adjective "managerial" relates to manager or management. Manager is a person who manages an industry or business or who deals with administration or a person who or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to include managerial services within the purview of the definition of FTS. Therefore the observation of the AO that the services are covered under the definition of technical servicers envisaged in the India Finland Tax Treaty does not hold good. 4.8 Further, assuming that even if the management services / functions can be brought within the definition of technical or consultancy services, yet the same will not be taxable as FTS as the other element in clause (c) of Article 13(4) of the DTAA viz., "make available" is not satisfied in the instant case which has been explained in detail in the paragraphs mentioned here in below. 4.9 It is submitted that the India-Finland DTAA has hot defined what constitutes as 'make available technical knowledge, experience, skill etc'. However, the term has been explained by way of examples in the Protocol to the India-US DTAA (which has a similar provision). The Protocol attached to arid forming part of the India-US DTAA confirms that the MOU is intended to give guidance to both the tax payers and tax authorities (of both the contracting states) in interpreting Fees for Technical Services. The MOU states as under: "Generally spea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant would like to sight before your honour a few of the case decisions on this point. 4.13 The Hon'ble Karnataka High court in case of De Beers India Minerals (P.) Limited [2012] (346 ITR 467), had the occasion to deal with the concept of 'make available' which was explained as under: "It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that 16 the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does not mean that technology Is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available." 4.14 it is respectf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit and without recourse to the performer of services, in future". In Raymond's case (supra), the Tribunal also held that rendering of technical services cannot be equated with making available the technical services. Later, in the case of CESC Ltd. vs. Dy. CIT (2003) 87 ITD 653 (Cal.)(TM) also, the question regarding the scope of expression 'making available' came up for the consideration. In that case also the view was that "not only the services should be of technical in nature but such as to result in making the technology available to the person receiving the technical services. We also agree that merely because the provision of the service may require technical input by the person providing the service, it cannot be said that technical knowledge, skills, etc. are made available to the person purchasing the service". 4.16 The Hon'ble Delhi High Court in case of Guy Carpenter and Co. (ITA NO. 202/2012 dtd. 23.04.2012) has dismissed the revenue's appeal and agreed with the finding of Delhi Tribunal that "make available" condition has not been satisfied in as much as no technical knowledge, experience, skill, know-how, processes, have been made available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. 5.0 Without prejudice to the aforesaid, the appellant further wishes to submit before your kindself that on perusal of the assessment order, it appears that the AO has not disputed the concept of "make available" vis-a-vis services rendered as contended by the appellant. However, the AO is of the view that the meaning of the phrase "makeavailable" used in the India-Finland Treaty which has been imported by the appellant from the India USA DTAA is not correct and therefore the disallowed the expense on this ground. 5.1 In this regard, the appellant humbly wishes to submit before your kindself that the India-Finland DTAA has not interpreted the meaning of "makeavailable" and for this reason the appellant company has resorted to MOU of India US DTAA where in the word "make- available" has been explicitly dealt with. The assessing officer has objected the reference made to India US DTAA by the appellant company stating that the meaning assigned to the word "make-available" in the India-US DTAA-cannot be used to used to interpret the meaning of "make available" in India Finland Treaty. 5.2 The appellant would like to submit that none of the services received from Outotec OY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , In this case as well while interpreting the term "make available" as per India-UK Treaty, the Tribunal held as under: "94. The Memorandum of Understanding appended to the DTA with USA and the Singapore DTA can be looked into as aids to the construction of the UK DTA. They deal with the same subject (fees for technical services, referred to in the US agreement as "fees for included services"). As noted earlier, it cannot be said that different meanings should be assigned to the US and UK agreements merely because of the MOU despite the fact that the subject matter dealt with is the same and both have been entered into by the same country on one side (India). The MoU supports the contention of the assessee regarding the interpretation of the words "make available". The portions of the MoU explaining para 4(b) of the relevant article, which we have extracted earlier in our order while adverting to the contentions of the assessee, fully support its interpretation. Example (4) given in the MoU also supports it This is of a US company manufacturing wallboard for the assessee using assessee's raw material but using its own plant. No technical knowledge, experience, skills, plan o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the necessary words in the Singapore agreements. As Mr. Dastur rightly remarked, It is a process of evolution guided by experience and what started in 1990 - the DTA with the US - as a MoU gradually crystallised and got incorporated in the article itself in the DTA with Singapore." 5.5 In most of the cases cited above, the relevant treaty for which the decision has been en is a treaty other than the USA treaty. Few other cases where the treaty interpretation has been followed are: - Deputy Director of Income-tax vs. Preroy A.G. [2010] 39 SOT 187 (MUM.) - Permasteeiisa (India) (P.) Ltd. vs DCIT [2014] 51 taxmann.com 502 (Bangalore - Trib.) 5.6 In view of the above, the contention of the AO that the concept of "make available" is limited to the USA DTAA and cannot be used to interpret other DTAAs is not tenable. Ground No. 2(a), (b), (c) These grounds are directed against disallowance of Consultancy Charges amounting to Rs. 6,89,025 and Rs. 4,81,308 paid to International Projects OY and Outotec Research Oy respectively. 6.2 Submission 6.3 In this connection it is submitted that the appellant company was set up in the financial year 2007-08, for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "make-available" in the India-US DTAA cannot be used to used to interpret the meaning of "make available" in India Finland Treaty. 6.8 In this connection reference is invited the decision of the Hon'ble Kolkata Tribunal in the case of CESC Ltd v DCIT (supra) where in it is specifically stated that India-US treaty could be applied while interpreting the provisions of, India UK treaty. A similar decision was also rendered by the Hon'ble Mumbai Tribunal in the case of Raymond Ltd v DCIT (Supra). 6.9 So in view of the above discussion and also the judicial precedence deliberated above it is humbly submitted that the payment made by the appellant company to IPS and ORY being not taxable in India, there was no liability on the part of the appellant to deduct tax from such payments and accordingly the same cannot be disallowed u/s 40(a)(i) of the Act. 7.0 On going through the submission of the appellant, it is amply clear that the concept of "make available" would be applicable under the treaty provisions not requiring the appellant to withhold tax. Hence, the appellant humbly prays that the additions made by the AO be deleted." 5. The Commissioner of Income Tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. 5.6. I have perused the agreement between the appellant and Outotec Oyj. Some services which the service provider is required to provide are given below: 10. Information Technology services- * IT Infrastructure services - Wide Area Network - Outotec Active Directory - Anti Virus Control - Mail Lotus Notes - Internet Access - Remote Access - Dial-up and Wireless service - Push Mail - Partner Virtual Private Network (VPN) - PC support for the Finish group companies located at Espoo campus * IT Infrastructure special services - Disk space for Outotec Minerals Oy - Wide Area Network (WAN) acceleration systems for the group companies - Client administration system (CMS) service - Virtual private network hardware site connection (VN HW site connection) * IT Application services - SAP and SAP related services including licences for the use of SAP server hosting and maintenance obtained from a third party - Project data administration systems including document administration and project collaboration and their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RM), product data administration (PDM) and ecatalog 5.7. There is no doubt that the service provider is making available technical know-how. From a perusal of the services to be rendered by Outotec OY, I am of the view that they are covered by clause 4 (c) of Article 13 of the India Finland DTAA. A perusal of services to be rendered makes it very clear that technical knowledge has been made available to the appellant. 5.8. Some services rendered are quite clearly in the nature of technical services and technical knowledge made available for use by the recipients. As can be seen, the service provider was to "develop maintain intranet platform". This certainty cannot be termed as management or consultancy service. It is in the nature of technical service. Further the service provider was to support and develop the technologies........by participating in IPR committee and Research and Technology Development Committee. These are definitely technical in nature. 5.9. Definition of the term "Fees for Technical Services" (FTS) has been a matter of controversy for quite some time because different interpretations have been given by various courts with regard to the true scope and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge or know-how on his own in future without the aid of the service provider. In other words, to fit into the terminology "making available", the technical knowledge, skill?, etc., must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the service offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does not mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall per se be considered to make the technology available. In other words, payment of consideration would be regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom fees for technical services are paid make available not only technical knowledge but also skills, experience, process, know-how. 5.23. I shall now discuss Section 5 of the I. T. Act which talks of what the total income of a person who is a resident and non-resident is:- "(1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which - (a) is received or is deemed to be received in India in such year by or on behalf of such person: or (b) accrues or arises or is deemed to accrue or arise to him in India during such year: or I accrues or arises to him outside India during such year: Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-s. (6) of s. 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which - (a) is received or is deemed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (other than salary) to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of such sum so chargeable, and upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable. (3) Subject to rules made under sub-section (5) any person entitled to receive any interest or other sum on which income-tax has to be deducted under subsection (1) may make an application in the prescribed form to the Assessing Officer for the grant of a certificate authorising him to receive such interest or other sum without deduction of tax under that sub-section, and where any such certificate is granted, every person responsible for paying such interest or other sum to the person to whom such certificate is granted shall, so long as the certificate is in force, make payment of such interest or other sum without deducting tax thereon under subsection (1). (4) A certificate granted under sub-section (3) shall remain in force till the expiry of the period specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,815/- to International Project Services Oy. (IPS) 3. Briefly stated, the facts of the case are that the assessee, an Indian company, is engaged in the business of providing marketing, supervision and support services for the mining metallurgical as well as metals, minerals and chemical processing industry. A sum of Rs. 1,92,86,815/-was claimed as deduction under the head 'Supervision charges.' On being called upon to explain as to why no deduction of tax at source was made in respect of such payments credited to non-resident, the assessee stated that such amount was not chargeable to tax in the hands of the recipient as per Article 13 of the Double Taxation Avoidance Agreement between India and Finland (hereinafter called 'DTAA') and as such there was no obligation to deduct tax at source. At the same time, the assessee admitted the taxability of the amount in the hands of the payee in terms of section 9 of the Act. The AO observed that the assessee started deducting tax at source after 1.4.2011 on payments made to this resident of Finland, for similar services at the applicable rates of tax. The assessee's contention that deduction of tax at source was sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) insisted on its production, which the assessee failed to submit. Then, the assessee was required to furnish the details of payments made to IPS as per the terms of the so-called Agreement, which stipulated for the release of payment within 15 days from the date of receipt of invoice. The assessee submitted that no payment was made to IPS and the entire amount of Rs. 1.92 crore was outstanding at the end of the year. In view of the fact that the so-called agreement provided for realizing payment within 15 days from the date of receipt of invoices and there was no payment whatsoever made by the assessee to IPS throughout the year, the ld. CIT(A), prima facie, inferred that there was no evidence of rendering of any services by IPS. Then, the ld. CIT(A) required the assessee to furnish copies of its correspondence with IPS about the requirement of services to be rendered, nature of services rendered and the correspondence during and after the rendition of services. The assessee admitted that no such correspondence was available. The ld. CIT(A) noticed that the aspect of rendition of actual services by IPS was not examined by the AO. He further noticed an inconsistency in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source. In view of the non-deduction of tax at source, the ld. CIT(A) held that the provisions of section 40(a)(i) were attracted and, consequently, the disallowance of Rs. 1.92 crore was upheld. The assessee is aggrieved against the sustenance of this addition. 4. We have heard the rival submissions and perused the relevant material on record. The short controversy in this appeal is the sustainability or otherwise of disallowance of Rs. 1.92 crore made u/s 40(a)(i) of the Act. The factual matrix in a nutshell is that the assessee received a sum of Rs. 2.41 crore from Sterlite Industries (I) Ltd., for rendering of supervisory services in connection with erection, commissioning and training for their plant in Tuticorin. Such services were provided by the assessee by outsourcing the same and a sum of Rs. 1.92 crore was paid for that. The assessee claimed deduction for Rs. 1.92 crore, which the AO disallowed u/s 40(a)(i) as, in his opinion, the amount so paid was chargeable to tax in the hands of the recipient and, on the failure of the assessee to deduct tax at source in terms of section 195 of the Act, the disallowance was called for u/s 40(a)(i). 5. At this juncture, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the computation of his total income under the head 'Profits and gains of business or profession.' 7. Coming back to the facts of the instant case, it is observed that the assessee did credit a sum of Rs. 1.92 crore payable outside India without deduction of tax at source for which the AO invoked the provisions of section 40(a)(i) of the Act. The claim of the assessee is that the expense so incurred payable in Finland is not chargeable to tax in the hands of IPS. On the other hand, the AO has made out a case that the amount in question is income of the Finland resident by way of 'fees for technical services' in terms of section 9(1)(vii) read with section 5 of the Act. In order to appreciate the rival claims, it is befitting to take note of the prescription of section 9(1)(vii) of the Act, which provides that any income by way of fees for technical services payable, inter alia, by: '(b) a person who is a resident, except where the fees are payable in respect of services utilized in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India' shall be deemed to accrue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into an agreement with the Government of any country outside India under sub section (1) for granting relief of tax or for avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, 'the provisions of this Act shall apply to the extent they are more beneficial to that assessee'. The crux of sub-section (2) is that where a DTAA has been entered into with another country, then the provisions of the Act shall apply only if they are more beneficial to the assessee. In simple words, if there is a conflict between the provisions under the Act and the DTAA on a point, the assessee will be entitled to be subjected to the more beneficial provision out of the two. If the provision of the Act on a particular issue is more beneficial to the assessee vis-a-vis that in the DTAA, then such provision of the Act shall apply and vice versa. The Hon'ble Supreme Court in the case of CIT v. P.V.A.L. Kulandagan Chettiar [2004] 267 ITR 654/137 Taxman 460 has held that the provisions of sections 4 and 5 are subject to the contrary provision, if any, in DTAA. Such provisions of a DTAA shall prevail over the Act and work as an exception to or modification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; ** ** (e) to an employee of the person making the payments or to any individual or partnership for professional services as defined in Article 15". 6. ** ** ** . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as 'making available' of the technical services, notwithstanding the fact that its benefit flowed directly and solely to the payer of the services,. The Special bench of the tribunal in Mahindra & Mahindra Ltd. v. Dy. CIT [2009] 122 TTJ 577 (Mum.) has discussed the concept of 'make available'. In that case, the lead managers had rendered technical, managerial or consultancy services in the GDR issue, which services were not made available to the assessee inasmuch as the payer only derived the benefit from the technical services provided by the lead managers without getting any technical knowledge, experience or skill in its possession for use in future. In that view of the matter, it was held that the 'management and selling commission' could not be taxed in India as per the DTAA because nothing was made available to the payer. It follows that in order to be covered within the expression 'make available', what is necessary is that the service provider should transmit the technical knowledge etc. to the payer so that the payer may use such technical knowledge in future without involvement of the service provider. 13. Adverting to the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e five engineers as covered under Article 15 of the DTAA, thereby changing the point of the view of the AO on the same issue. It goes without saying that the powers of the CIT(A) are co-terminus with that of the AO inasmuch as he, while hearing an appeal against the assessment order, has all the powers which vest with the AO on the issue before him. The Hon'ble Summit Court in Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688/[1990] 53 Taxman 85 (SC) has held so. Even otherwise, section 251 dealing with the powers of the CIT(A) provides through sub-section (1) that : 'In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment.....'. As such, we do not see any embargo on the power of the CIT(A) in approaching the issue before him in a different manner from that of the AO. 16. As the assessee has assailed the findings given by the ld. CIT(A) with regard to the credibility of the Agreement with IPS, it becomes imperative for us to decide about the genuineness or otherwise of the socalled Agreement between the assessee and IPS, a copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or outsourced from some third party. If such services in erection and commissioning of plant were actually to be provided by IPS to Sterlite, then, there should have been some tripartite agreement amongst the assessee, Sterlite and IPS, which is actually not the case. There is one more aspect. The so-called fourpaged Agreement between the assessee and IPS is dated 1.11.2008. We are at loss to comprehend as to how the assessee could enter into agreement with IPS for rendering supervisory services on 1.11.2008, when the agreement with Sterlite was itself signed, much later, on 21.11.08. The ld. AR was specifically asked if he could produce Agreement with IPS in original, which was responded in negative. To be precise, there is no documentary evidence divulging the rendering of services by IPS Finland in the erection and commissioning of plant of Sterlite. The above discussion leads us to an irresistible conclusion that IPS was nowhere involved in providing supervisory services to Sterlite for and on behalf of the assessee. The view canvassed by the ld. CIT(A) on this aspect of the matter is, ergo, upheld. 17. Be that as it may, there is no denial of fact that the assessee, in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Article 15. This argument was countered by the ld. DR by contending that the amount in question directly falls under Article 15 and hence the same should be retained here alone. 20. The argument of the ld. AR though looks attractive at the first blush but falls to the ground on a closer examination. The precise question is that which of the two Articles, namely, 13 or 15, should have primacy in the facts and circumstances as are instantly prevailing? In our considered opinion, the answer to this question is not too far to seek. Relevant part of Para 5 of Article 13, as reproduced above, unambiguously states that the definition of fees for technical services in paragraph 4 shall not include amounts paid '..... (e) to any individual ....for professional services as defined in Article 15". When we read para 5 of Article 13 in conjunction with Article 15, there remains absolutely no doubt that the amount payable by the assessee to certain individual residents from Finland is covered only under Article 15 and not Article 13 of the DTAA. 21. Delving into the mandate of para 1 of Article 15 of the DTAA, we find that the income derived by a resident of Finland in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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