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TMI Blog2021 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... 01st July, 2007 whereby the Applicant provides various Management Support Services to Aircom India with a view to rationalize and standardize the business conducted by Aircom India in India in accordance with the international best practices. The services as per the MSA are as under: * Establishment and set-up advice and services * General management advice and services * Group bulk purchasing arrangement * Group-led sales, marketing and business development services * General Treasury and financial management advice and services * Legal, Human Resource, Information Technology ('IT") services 3. The Applicant has filed the present application in connection with this MSA and the following questions have been raised in the application: (i) Whether based on the facts and circumstances of the case, the payments being made by Aircom India to the Applicant under the MSA for the services specified there under would be characterized as "fee for technical services "("FTS") under Article 13(4) of the convention between the Government of the Republic of India and the Government of the United Kingdom of Great Britain and Northern Ireland for the avoidance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained that Aircom India was making payment to the Applicant for specific global support services which were in the nature of general management, finance, information technology, marketing, sales, consulting and legal support services. The payment was being made to the Applicant's account in UK. The service fee payable was as per Schedule-2 to the agreement and the same was based on the total cost incurred by the Applicant in providing these services, as increased by a mark-up of 6%, and apportioned to various affiliates (group entities) to which such services were provided. 6. The Ld. A.R. submitted that as per Explanation 2 to Section 9(1)(vii) of the Act, fee for technical services ('FTS') is defined as consideration for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel). However, Article 13(4) of India-UK Tax Treaty defines FTS as payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including the provisions of services of technical or other personnel). Based on the definition of FTS under the Income-tax Act and Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 13(4) on FTS of the India-UK Treaty. Thus the contention of the Applicant was that the payment made by Aircom India to the Applicant was in respect of managerial services only. Further that the managerial services provided by the Applicant to Aircom India did not make available any technical knowledge, experience or skill. 9. The Ld. AR explained that the word 'managerial' was initially included in the original definition of FTS but was omitted by the revised DTAA between India and UK entered into in the year 1993. This shows that intention of the Treaty partners was to exclude the managerial services from the purview of the Article 13 of the treaty. The Applicant has placed reliance on the Memorandum of Understanding (MoU) entered into between India & USA. The MoU, on Article 12 of the India-US Treaty, which is akin to Article 13(4) of the India UK Treaty, has interpreted the definition of fee for included services (FIS) and has interpreted the meaning of the terms 'technical or consultancy services'. As per this MOU only technical or consultancy services are covered within the ambit of Article 12 and that a technical service is one that requires an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnology Resources (P) Ltd. (407 ITR 327) (Kerala HC) (xi) CESC Vs CIT (80 TTJ 806) (CAL) (xii) Anapharm Inc. (AAR No. 746 of 2007) (xiii) Bharti AXA General Insurance Co. Ltd. (326 ITR 477) The Applicant thus contended that on the facts and circumstances of the case the payment received by it from Aircom India under the MSA was not liable to tax in India under the definition of FTS under Article 13.4 of the India-UK DTAA. 11. On the issue of royalty, the Ld. A.R. submitted that the payment made to the Applicant by Aircom India does not fall within the definition of 'Royalty' as per Explanation 2 to Section 9(1)(vi) of the Act or within the meaning of the term in Article 13 of India-UK Treaty. It was explained that the term 'Royalty' as defined in the Act necessitates the transfer of a right from the owner of such right to another person for commercial exploitation. The Ld AR explained that the payments were neither for use or right to use any intangible or tangible property, nor do the services involve the right to use copyright, patent, design, know how or equipment and there was no transfer of any technical plan or design. Further, that the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a blend of software consulting and training services and the Applicant was helping Aircom India to render its functions, which were technical in nature. It was submitted that services in the nature of Software Testing Services, Software Consultancy Services, Software Deployment Service/Product Delivery and Software Trading Activity (Sub-licensing) were provided by Aircom India to its clients with assistance from the Applicant through the services specified in the MSA. 15. The Revenue contended that the services rendered by the Applicant under the MSA were not only in the nature of technical and consultancy services but they also 'made available' technology to Aircom India on many counts, as under: (i) The Functional Analysis provided in the Transfer Pricing Report for the FY 2013-14 shows that all functions right from Conceptualisation to Design Review to Marketing were technical functions. The Revenue has contended that under the head 'Receipt of Management Support Services', the Indian subsidiary has conducted, all the services as per the MSA, which were incidental to business and enabled Aircom India to conduct its business operations in an effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g services etc. Further that the words 'Technical' and 'Consultancy' were carefully avoided in the MSA to take benefit of the amended provisions of India-UK DTAA where the "Managerial" services have been taken out of purview of "Fees for Technical Services". 17. The Revenue has drawn our attention to MoU concerning Article 12 (FIS) of India U.S Treaty, and explained that where an American company provides the formula of manufacturing to Indian entity, the test of "make available" was satisfied. Similarly, where American company sends experts to India to show engineers how to produce extra strong Wall Board, the make available test was satisfied. Similarly, make available test was also satisfied when an American consultant helps an Indian Company to arrive at its proper marketing strategy (instead of providing marketing strategies). On the contention of the Applicant that just because the services/discussions were continuous it cannot be said that the technological services were made available; the Revenue averred that if it was a prolonged discussion, the technology was made available for a longer period of time. It was further submitted that once certain iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of any information concerning industrial, commercial or scientific experience. According to Revenue, in the instant case, the Applicant was providing services which were technical in nature and which were made available to the subsidiary to enable them to function independently. The other services as mentioned in MSA were primarily in the nature ancillary and subsidiary to the technical information provided by the Applicant to Indian entity. 19. On the issue of royalty, the Revenue has submitted that payment by Aircom India to Applicant was for the use of information concerning industrial, commercial or scientific experience and hence it was covered within the ambit of 'Royalty' under India-UK DTAA. In support of this argument, the Revenue has submitted that the Applicant had passed on its experience in network planning, optimization, open source software (OSS) and consultancy for mobile networks to Aircom India which was engaged in providing consultancy and support services to wireless network operators in South Asian countries by offering end-to-end wireless solutions through a blend of software consulting and training services. Hence, it is sharing its past ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue had misunderstood the services rendered by the Applicant to Aircom India with the business operations of Aircom India. The Applicant reiterated that the services rendered were as per Schedule-3 of the MSA and the exact role of the Applicant and the benefit to subsidiary by availing those services was as under: (i) General management support services- * Strategic management support; target setting; * Direct customer negotiation; * Business review and consultation; * Key executive decision making; * Provision of central services for regional requirement. It has further been submitted that services under this head allow the entities of the Aircom Group (including Aircom India) to gain benefit of the skills, expertise, experience, information etc. possessed by the Applicants to ensure that the international best practices are followed globally. (ii) Group-led sales, marketing and business development services - * Vendor management; * Brochure production for all countries; * Exhibition used for advertising products and services; * PR campaigns; * Creation and maintenance of websites for all countries; * Sales presentations. It has been submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vers and softwares procured for the operating systems from Microsoft, Blackberry etc. that are purchased from independent vendors and receives payments for the direct purchase cost of licences and the relevant services from its subsidiaries. (vii) Any other services- These include general support services in relation to insurance charges and strategic development and project team support (as required), project executive, central sourcing of computer equipment, software licences etc. It is reiterated that the services help the Aircom Group in following globally consistent policies and provide access to central platforms and systems to the group entities. 24. The Applicant further submitted that it had provided all the facts including the details of the nature of the services rendered by the Applicant and also substantiated the same with the emails to illustrate each type of service rendered by the Applicant. The Applicant filed additional email evidences along with the submission dated 03.11.2017. It was contended that these email communications clearly substantiate the precise nature of the management support services rendered by the Applicant and were in line with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (307 ITR 418)(AAR). Findings and Ruling 28. We have carefully considered the facts of the case, the submissions of the Applicant, the objections raised by the Revenue and the material details brought on record in the course of this proceeding. The Applicant is engaged in development of software, network planning, optimization, open source software and consultancy for mobile network from conceptualisation to the final product, which is highly technology intensive. The Indian subsidiary provides software testing services, consultancy services to the Applicant as well as third parties which include software deployment services and software trading services for which it charges the Applicant the cost along with the mark-up. This transaction between the Applicant and Aircom India is not the subject matter of this application. The Applicant also renders management support services to its subsidiaries including Aircom India in order to conduct its business operations in an effective and uniform manner. The services under the MSA allow the entities of the Aircom Group (including Aircom India) to gain benefit of the skills, expertise, experience, information etc. possessed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which we have to examine. 30. The Revenue has referred to Clause 4 of the Agreement in respect of Intellectual Property Ownership and Schedule 2 regarding service fee payable and contended that the consideration being paid under MSA was for the use of the IPRs of the parent. According to the Revenue, the consideration had a direct reference to the Software License Agreement (SLA), which makes the services provided under MSA as ancillary and subsidiary to the services provided under the SLA. The Clause 4 of the agreement regarding IPR is found to be as under: 1. Each Subsidiary acknowledges and agrees that the Parent (or its licensors) is the beneficial owner of the Intellectual Property Rights subsisting in and associated with the Services and their provision. 2. The Parent hereby licenses each Subsidiary to use the Intellectual Property Rights as is reasonably necessary for such Subsidiary to enjoy the benefit of the Services. 31. The above clause merely stipulates that the parent i.e. the Applicant is the beneficial owner of the IPRs subsisting in and associated with the services and their provisions. As the services were being provided by the parent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... films, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience; and (b) payments of any kind received as consideration for the use of or the right to use, any industrial, commercial or scientific equipment, other than income derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic. The Article 13.4 of the Indo-UK convention stipulates that "fees for technical services" means payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services of a 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 paragraph 3(a) of this article is received; or (b) are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received; or (c) make available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether those services 'make available' the technology to the recipient. 35. The Applicant has contended that the services rendered as per the MSA were not technical or consultancy services but were managerial in nature. However, it has not been demonstrated as to how the services rendered were managerial and not technical or consultancy services. The MoU to the Indo-USA DTAA explains that technical services means services requiring expertise in the technology whereas the consultancy services means advisory services and that the two services might be overlapping. Further, the technical or consultancy services will be considered "included services" to the extent: (a) They are ancillary and subsidiary to the application or enjoyment of a right, property or information for which the royalty payment is made, or; (b) They make available technical knowledge, experience, skill, knowhow or processes or consist of the development and transfer of a technical plan or a technical design. The MoU further clarifies that in order for a service fee to be considered "ancillary and subsidiary", the service must be related to the application or enjoyment of the right, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 . Of a person having knowledge of or expertise in a particular art, science, or other subject . 2 . pertaining to, involving, or characteristic of a particular art, science, profession, or occupation, or the applied arts and sciences generally. In CBDT v. Oberoi Hotels India (P.) Ltd. [1998] 97 Taxman 453, the Supreme Court reiterated the view that the term ' technical services ' included professional services . In the case of Dean, Goa Medical College v. Dr. Sudhir Kumar Solanki [2001] 7 SCC 645, the question was whether the expression technical institutions ' takes within its fold the medical colleges . The Supreme Court observed that "the dictionary meaning of the word "technical " is also "professional" and is used in contradistinction with pure sciences to prepare the professionals in applied sciences" . However, we would like to observe that it is not any or every professional service that amounts to technical service. Professionalism and an element of expertise should be at the back of such services. There is a decision of Andhra Pradesh High Court in which the ambit of expression 'technical service' was considered . In G. V. K. Industries Ltd. v. ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arified that the Applicant did not render services related to the pricing of software consultancy services which are rendered by Aircom India to its third party customers. We have looked into the services detailed in the schedule to the Agreement with which we are concerned. In the course of hearing the Ld Counsel of the Applicant was required to provide full description of each constituent of the intra-group of service by explaining what was the nature of service and how it got rendered to Aircom India. The Applicant was also required to provide evidence of rendering services and if it was done through e-mail, a copy of such e-mail was called for. The Applicant has provided the brief description of various services along with the cost-allocation and copy of e-mails in support of the services rendered vide letters dated 18.08.2017 and dated 03.11.2017, which have been considered. 38. The Revenue has contended that the Applicant did not give the complete documentary evidence i.e. e-mail correspondences. On the other hand, the Applicant has submitted that it has made available the complete evidences as available with him. What was required to be provided by the Applicant was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marketing and business development services including vendor management, sales presentations, general treasury and financial management advice and services, legal services including contract management, contract negotiations and advice, legal compliance assistance, consulting including advice on pricing, customer negotiations, customer management etc., human resource services, information technology (IT) and solution services including network sharing development and strategic development, advice on sales presentations, training of IT engineers/employees etc. are all technical services which cannot be provided without the domain knowledge of the relevant field. Thus, the majority of the services are technical in nature and the remaining one are in the area of consultancy. Therefore, we cannot agree with the submission that they were only managerial in nature and not in the nature of technical or consultancy services. 40. Next, we have to examine whether these services were being 'made available' to Aircom India. The Revenue has brought to our notice specific instances of services on the basis of E-mail communications that demonstrate that the nature of services rende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o what should be the price, how much resources should be committed, etc. Thus, quite clearly, the Applicant is making available technical skill and experience of finalzing a business strategy . It is not a case where finalized business strategy is given to Aircom India. The business strategy is finalized by Aircom India using technical expertise of Applicant. The consultancy service rendered in this instance cannot be said to be made available 4 447- These emails are illustration as to how employees of the Applicant are assisting employees of Aircom India to resolve technical issues that are arising during the training that Aircom India is providing to its client. At page 449 Ishan, employee of Aircom India, writes to Tom/Billy of Aircom International about a strange issues that he facing regarding Asset GSM/UMTS training. Aircom India is providing technical training to customers but certain issues are coming up GSM cell layers, terminal types, Nth best server etc. Due to this training is getting hampered. Then on page 448, the assistance is provided by the Applicant to resolve the issues. Some part of the assistance has been blacked out. But what is clear is that technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd guidance. Strategies are also suggested. Thus, quite clearly, the Applicant is making available technical skill and experience of providing service to a client. It is not a case where finalized product is given to Aircom India. The service to its client is provided by Aircom India using technical expertise of Applicant. This service is in respect of Sales and in nature of sales support service. A query was raised by a client regarding availability of a tool for converting certain reports into a specified format and the correspondence is in that regard. Even if the nature of correspondence is In respect of technical aspect of the query, there is no conclusive evidence that this service was actually rendered and the technical input was provided. Once a query is raised by the client the same has to be responded. The service is in the nature of Sales support and even if rendering of technical service is discussed, it is found not made available in this case. 6 461 This page illustrates various training programs being organized by Applicant for Aircom India. It talks about new starter training being carried out in India which will evolve into the official OPTIMA delivery programm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extensive features set. It is further mentioned that V7.0 is the largest product relapsed Aircom has ever done and it has various technology services i.e. LTE Technology support across the planning and optimization module including asset, advances and financial analysis. It again incorporates a new module in the form of carried traffic analysis providing an insight into backhaul and transmission network requirements that these new technologies other features including Google Earth support and extended corrector set available across enterprises. It enables Aircom to increase market penetration through diverse offering options and features developed in connection with leading equipment vendors. It is further mentioned it was done by the R&D Team In product engineering, software development and QA for achieving. The above discussion shows that the Aircom International has sent this mail to Aircom employees which are very much technical in nature. From the above details it is quite clear that Aircom International has provided all the above technical mobile products details to Aircom employees. Hence, in this way the technical help is being provided to Aircom employees and this help i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the various things. In this way the make available clause is being satisfied. This correspondence is in respect of training of sales personnel about new features of ASSET 8.1 and CONNECT 8.1 as part of pre-sales activity. No technical skill can be said to made available in such training . 11 958 This email has been sent to Aircom employees related to the new release the Aircoms planning and optimization software and the update of both ASSET 7.0 and CONNECT 7.0 with Wimex and LTE mobile broadband technologies. This email has been shown under the head marketing while on perusal of it was notice that it has mentioned many technical nature advice and guidance this shown the rendered services are technical in nature and they are being make available through training This is part of Marketing service relating to new release of software. We don't find any training imparted in this case. The new release was to be posted on the website, which can't be considered as training. Nothing is made available in this case. 12 968-969 This email is the illustration of make available through marketing. In this email has been shown under the head marketing while on this email fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable. The case study was only to demonstrate how to plan the transport capacity for small cell LTE. 14 1017 This email has been shown under the head marketing while on perusal of it, some technical challenges, the videos from the sales training details have been mentioned. It again shows that the technical help and challenges are being solved through training; hence, the technical nature and make available clause are being satisfied for charging fee for technical services. Only the Demo videos for sales & pre-sales training were available on Pulse for navigation. Even if the contents are technical in nature, the placement of videos /Demos on website can't be considered as the service being made amiable. 15 1025 This email has been again shown under the head marketing while on perusal of it was notice in this email technical competent of the staff resourcefulness, inadequate work, has been detailed. It is further mentioned that the technical team is coming. It shows that the technical nature services are being provided. Only the required skills for marketing workforce are discussed. No evidence of service being made available. 16 1027 This was shown as illust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered may be the product of intense technological effort and a lot of technical knowledge and experience of the service provider would have gone into it. But that is not enough to fall within the description of services which make available the technical knowledge, etc. 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 future without depending on the provider. 42. When we examine the facts of the case on the yardstick of 'make available' as decided in the case of Intertek, it is found that the nature of services in this case are such that the technical knowledge, skills etc. was not passed on or did not remain with the recipient of the service, except in the case of "Direct Technical Advice, Support and Management" which is part of I. T. services. The training provided by the Applicant is found to be in respect of technical aspect of new launch of various software programmes and was meant for sales personnel. Such training cannot be said to have made available any technical knowledge based on which such new software modules could be developed by Airco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the objection was based on the services rendered under software services and was not in respect of MSA services. This contention of the Applicant is not found correct. The evidences in the form of copy of e-mail communications were filed in respect of services rendered under MSA only and not in respect of software services. Therefore, the specific instance of technical service rendered and made available as pointed out by the Revenue is found to be in respect of MSA services only and these were not in respect of software services. 45. The next exercise will be to quantify the amount in respect of the technical services which fulfil the make available condition. As discussed earlier only a part of the I.T. services is found to have imparted and made available technical knowledge, experience, skill, knowhow, process etc. which could enable the recipient to apply the same without reference to the service provider. The Applicant has filed copy of quarterly invoice raised for management support services along with the back-up calculations for each invoice. It is found that in the back up calculation the cost of each service has been separately computed. Therefore, one can as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relied upon the ruling of this Authority in DTZ Debenham Tie Leung Limited (AAR No. 1371 of 2012 dated 19.07.2019)). In that case, managerial services with regard to Article 13.3 and 13.4 of the India-UK DTAA were exhaustively dealt with along with the relative case laws. This Authority held in that case that payment received for various services in terms of the services agreement was not in the nature of "fee for technical services" under Article 13.4 of India-UK Tax Treaty as the services rendered by the non-resident company do not meet the requirement of 'make available' under the treaty. However, unlike the present case no IT services were rendered in the case of DTZ Debenham Tie Leung Limited (supra). In the present case not only IT service was rendered but "direct technical advice, support and management" service is found made available. To this extent the facts are different and the ratio of that decision cannot be applied to this case. 48. On the other hand the Revenue has placed reliance on the case of Shell India Marketing Private Limited (AAR) (supra). In that case Shell India was receiving General Business Support Services from Shell International Petro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it was had held that payment of consultancy fees to Singaporean company for forex derivative transaction services was taxable as 'Fees for technical services'('FTS'). Thus the facts of the cases relied upon by the Revenue are also found different from the facts of the present case. 51. In view of the foregoing discussions, we are of the view that payment received for various services in terms of the MSA was not managerial but technical in nature. However, we also hold that only "direct technical advice, support and management including implementation" service provided under Information Technology (IT) service meets the requirement Of 'make available' in clause (c) of Article 13.4 under the treaty. Therefore, only this particular service is found to be in the nature of "fee for technical services" under Article 13.4(c) of India-UK Tax Treaty. Whether Royalty? 52. The Revenue has contended that payment by Aircom India to Applicant was for the use of information concerning industrial, commercial or scientific experience and hence it was within the ambit of 'Royalty' under India-UK DTAA. According to Revenue the Applicant has passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) of India-UK tax treaty defines 'royalty', which has already been reproduced earlier. For a payment to be construed as "royalty", the same would need to be in relation to the use or right to use or transfer of all or any rights in relation to: * Copyright, patent, trademark, design or model, plan, etc; or * Any secret formula or process; or * Information concerning industrial, commercial or scientific experience; or * Industrial, commercial or scientific equipment. 54. In this case the Applicant had entered into a MSA with Aircom India to provide certain services as stated therein with the intention to help the Aircom Group in following globally consistent policies and provide access to central platforms and systems, so that the individual entities of the Aircom Group need not invest their own resources. Revenue has contended that the payment was for the supply of information concerning industrial, commercial or scientific experience, and hence royalty. We have carefully considered the MSA and the factual matrix of the case and are of the considered view that the services rendered by the Applicant in the MSA are not intended to supply any knowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghted SOP from the Oncology Service Europe (Germany) and was allowed to view only SOP established by Oncology Service Europe, which was non transferable. It was held that consideration for sharing of scientific, or for that purpose industrial and commercial experiences, in this case was taxable in India as royalty under article 13(3) of India-Germany DTAA. Thus the facts of that case are found to be totally different. 57. In the case of TNT Express Worldwide (UK) Ltd. (supra), the U.K. Company had entered into a Management Services Agreement with a company TNT to provide advice, assistance and sales support services. The AO had asked the assessee to submit details to justify that said services did not fall within purview of royalty, but assessee had failed to produce relevant information, details and record to support its case. It was held that since information was necessary to segregate such part of payment which might not be falling under purview of royalty, Assessing officer had rightly treated entire consideration received by assessee as royalty in the absence of requisite details. Thus the facts of this case are also distinct. 58. Regarding reliance placed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve evidence of stay of any particular employee and rendering of service by them for more than 30 days in a twelvemonth period has been pointed out or brought on record by the Revenue. A mere stay of an employee doesn't establish that he had rendered the service all the time. In order to attract this provision there has to be concrete evidence to establish that the service was rendered through an employee for 30 days or more. In the absence of any such concrete evidence we can't hold that a Service PE was created in this case. The contention of Revenue is based on mere suspicion and not on hard facts. Further, as already discussed earlier the part of the services under MSA is found covered under Article 13 of the DTAA. We are, therefore, in agreement with the Applicant that it does not have a PE in India. As no business was carried out in India and in the absence of any PE, the payment for the services rendered under MSA cannot be considered as business income. 61. In view of the foregoing, the questions posed to us for a Ruling are answered as under: Que. 1 The payment made by Aircom India to the Applicant under the MSA for the services specified there under would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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