9911796707
TMI Blog2009 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... rman) and Mr. J. Khosla (Member) Present for the applicant Mr. A.K. Majumdar, Advocate Mr. Vikrant Suri, CA Mr. Satish Aggarwal, CA Present for the Department Ms. Nandita Kanchan, Addl. CIT RULING By Hon'ble Chairman - The applicant is a company incorporated in Japan. It is engaged in construction activities and provides architectural and civil engineering services. SMCC Construction India Limited (SMCI) is an Indian Company and a subsidiary of the applicant and is operating as a construction company involved in general construction and civil engineering. The said Company provides industrial construction and related engineering consultancy services. 2. The applicant had entered into a technical collaborati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income.). The DTAA has been amended by reducing the maximum rate 1 of tax payable on royalty at 10% and the protocol was notified by the Central Govt. under Section 90 of the Income-Tax Act, 1961 on 19th July, 2006. The applicant contends that in view of the amendment, the tax liable to be paid on the gross amount should be @ 10% instead of 20%. Accordingly, the applicant seeks the ruling of this Authority in respect of the following question:- Whether in the facts and circumstances of the case and in law, the income by way of royalties arising to the applicant in India in terms of Article 12 of the Agreement for avoidance of double taxation and prevention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk including cinematograph films and films or tapes for radio or television broadcasting, any patent trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4. The term "fees for technical services" as used in this article means payment of any amount to any person other than payments to an employee of a person making payments and to any individual for independent personal services referred to in article 14 in consideration for the services of a managerial, technical or consultancy nature including the provisions of services of technical or other personnel." 6. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the point that the payments received by the applicant from the SMCI are in the nature of royalties within the meaning of Article 12(3) of the DTAA. The Technical Collaboration Agreement makes it clear that the applicant (licensor) will be furnishing to the licensee the know-how and technical information and assistance for the marketing and provision of contract services. The term 'contract services' is defined in detail in Annexure-A. The term 'technical information' is that related to "basic design methods and turn-key construction management techniques as also other technical information available for the provision of the contract services as are applicable to the operations of the licensee". Some of the services or part of the assis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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