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TMI Blog2019 (7) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is in the nature of business profit and not fees for technical services. Therefore, following the decision of the Tribunal in assessee s own case for the assessment year 2012 13 and 2013 14 [ 2018 (12) TMI 57 - ITAT MUMBAI] we hold that the management fee received by the assessee from DDIL is not in the nature of fees for technical services but business profit. Having held so, it is necessary to examine whether such business profit is taxable in India. In this regard, the contention of the learned Authorised Representative is, as per Article 5(6)(b) of India Singapore Tax Treaty if the employees of the assessee for rendering services to the AE in India for a period of more than 30 days, it will constitute PE. He submitted, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 22-4-2019 - Shri Saktijit Dey, Judicial Member And Shri Manoj Kumar Aggarwal, Accountant Member For the Assessee : Shri Sunil Moti Lala For the Revenue : Shri Nishant Momaiya ORDER PER SAKTIJIT DEY. J.M. The aforesaid appeal has been filed by the assessee challenging the final assessment order dated 31st October 2017, passed under section 143(3) r/w section 144C(13) of the Income-tax Act, 1961 (for short the Act ) pertaining to the assessment year 2013 14. 2. On the instructions of the assessee the learned Authorised Representative did not press grounds no.2, 3 and 4. Hence, these grounds are dismissed as not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis and over all cash balances and various other services are in the nature of technical services. Thus, he called upon the assessee to explain why the management fee received should not be treated as fees for technical services and brought to tax in India. In response to the show cause notice issued by the Assessing Officer, the assessee made detailed submissions stating that as per Article 12(4) of the India Singapore Double Taxation Avoidance Agreement (DTAA) while providing managerial / technical services, the assessee must make available technical knowledge, experience skill, knowhow or process, which could enable the recipient of such services to apply the technology content therein independent of the service provider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the agreement the assessee is remunerated at cost plus 10% for the services rendered. The learned Authorised Representative submitted, the basic terms of the agreement have remained the same, though, it is renewed on yearly basis. He submitted, the management fee received by the assessee cannot be termed as fees for technical services under Article 12(4) of the India Singapore Tax Treaty, since, the assessee has not made available any technical knowledge, experience, skill, knowhow or process, while rendering such services. He submitted, though, learned DRP has held the management fee received by the assessee to be fees for technical services by relying upon its own order for the assessment year 2011 12, however, the final assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management fee received by the assessee cannot be treated as fees for technical services and is to be treated as business profit of the assessee. 7. Proceeding further, he submitted, since in the relevant year the total number of days assessee s employees stayed in India for rendering services is less than 30 days, there is no PE of the assessee in India as per Article 5(6)(b) of the India Singapore Tax Treaty to bring to tax the business profit at the hands of the assessee. 8. The learned Departmental Representative relied upon the observations of the Assessing Officer and learned DRP. 9. We have considered rival submissions and perused material on record. The dispute in the present appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 14 (supra), we hold that the management fee received by the assessee from DDIL is not in the nature of fees for technical services but business profit. 10. Having held so, it is necessary to examine whether such business profit is taxable in India. In this regard, the contention of the learned Authorised Representative is, as per Article 5(6)(b) of India Singapore Tax Treaty if the employees of the assessee for rendering services to the AE in India for a period of more than 30 days, it will constitute PE. He submitted, in the relevant previous year, only two employees of the assessee have stayed in India for rendering services for 18 man days and 15 solar days. Thus, he submitted, in neither of the cases, the stay of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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