9911796707
TMI Blog2021 (2) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. That on the facts and in the circumstances of the case and in law, the order passed under section 144C of the Income-tax Act, 1961 ("the Act") by the Learned Assessing Officer ("Ld. AO") is erroneous and bad in law as well as in facts. 2. That the Ld. AO and Ld. Dispute Resolution Panel ('Ld. DRP') on the facts and in the circumstances of the case, has erred in holding that the cost allocation of international freight logistic support services, amounting to INR 2,587,266,319 for services rendered outside India is in nature of fee for Technical Services/Fee for Included Services ('FIS') as per the provisions of section 9(1)(vii) of the Act as well as under Article 12 of the India-USA Double Taxation Avoidance Agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d manufacturing companies around the world. The operations of the Group span over United States, North America, Far East, India, Europe, Australia, New Zealand, Latin America, and the Middle Eastern countries. The assessee, incorporated in USA, operates in three primary segments: airfreight, ocean freight & ocean services, and customs brokerage and other services. The assessee provides similar services globally through wholly or majority-owned subsidiaries. The assessee, a tax resident of USA as per the domestic laws of USA and filed its tax residency certificate vide submission dated 13.01.2015. In India, the assessee provides services through its wholly-owned subsidiary Expeditors International (India) Pvt. Ltd. During the year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... why the International Freight Logistic Services and Reimbursement of Global Account Management Expenses would not constitute Fee for Technical Services as per the section 9(1)(vii) of the Income-tax Act, 1961 and India-USA tax treaty. Out of the above receipts, the assessee filed detailed reply on 25/02/2015. The Assessing Officer specifically mentioned in Para 3 that the contentions of the assessee was formed on the basis of DRP Direction for Assessment Year 2010-11. The Assessing Officer passed draft assessment order dated 30/03/2015. The assessee filed objection before DRP and the DRP vide order dated 23/12/2015 passed certain directions. The Assessing Officer passed the assessment order on 15/1/2016 thereby assessing the total income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard both the parties and perused all the relevant material available on record. As regards Ground No. 2, the Assessing Officer held that the services to the managerial/consultancy has to be considered in respect of fee for technical services/fee for included services in terms of Section 9(1)(vii) of the Income Tax Act, read with Article 12(5) of the Double Taxation Avoidance Agreement. The DRP confirmed the order of the Assessing Officer thereby holding that the GAM reimbursement and consideration received on account of cost allocation of flight logistic Support Services where in the nature of FIS and make available technical knowledge, experience, skill, knowhow in terms of Article 12(4)(v) of the DTAA. The Tribunal in Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations is purely logistic support provided by the assessee for shipment of transport of goods perform outside in India and the contract is entered between expertise international India Pvt. Ltd. and the customers i.e. at the consigner sent in the case of expert of Consignment from India to overseas countries found USA and between the assessee and the customer that is at the consignment end in the case of import of consignment from other countries i.e. USA to India. As regards GAM charges/expenses, the cost of these group is allocated to a respective countries benefited to these services and are incurred outside India. The GAM staff is employed with the assessee and there is no employer-employee relationship between the employees and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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