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TMI Blog2023 (12) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the respondent/assessee to its customers were non-exclusive and non-transferable and that the users were not given access to the source code. As regards the amount which the AO treated as FTS is concerned, the Tribunal concluded that Fee for Included Services (FIS) under the said Article would only mean payment made in consideration for rendering technical or consultancy services, if such services were ancillary and subsidiary to the enjoyment of right in the property. It was the Tribunal s view that since it had concluded that no right in the property had been transferred, Article 12(4)(a) of the DTAA had no applicability. Tribunal had also examined the applicability of Article 12(4)(b) of the DTAA. Tribunal concluded that the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Ld. ITAT erred in holding that amount received towards annual maintenance charges of the software are not ancillary or subsidiary to enjoyment of right to use software and thus not taxable as FTS/FIS under the Section 9(1)(vii) of the Act and under Article 12 of the India-US DTAA? 3. The record shows that the respondent/assessee had, under an End User Licence Agreement with its customers qua the period in issue, received Rs. 8,50,54,160/-, which included Rs. 7,27,33,773/- towards the sale of the End User Licence and Rs. 1,23,20,383/- on account of Annual Maintenance Charges (AMC). 4. The Assessing Officer (AO) treated the End User Licence fee received by the respondent/assessee as royalty and sought to tax the same under Section 9( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the Tribunal had also examined the applicability of Article 12(4)(b) of the DTAA. 8.1 Having examined the same, the Tribunal concluded that the respondent/assessee had not "made available" any technical knowledge, experience, skill, know-how etc, to the recipients of such services. A finding of fact was returned in that behalf. For convenience, the relevant observations made by the Tribunal are extracted hereafter : "9. In ground no. 6, the assessee has challenged the addition of Rs. 1,23,20,383/- by treating it as Fee for Included Services (FIS) under Article 12(4)(a) of Indian - USA DTAA. As discussed earlier, while completing the assessment, the Assessing Officer held that the amount received by the assessee towards gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available condition has to be satisfied. In the facts of the present appeal, the Departmental Authorities have failed to demonstrate that while rendering the services, the assessee had made available technical knowledge, experience, skills, knowhow etc. to the recipient of such services. That being the case, the amount received cannot be treated as FIS under Article 12(4)(b) of the tax treaty." 9. Having examined the impugned order and heard Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the appellant/revenue, we find that the first issue is covered by the judgment of the Supreme Court rendered in Engineering Analysis Centre of Excellence Pvt. Ltd. and the second issue, in any case, is connected, as rightly hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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