9911796707
TMI Blog2024 (1) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... through the nature of services received and whether make available condition was satisfied, ultimately concluded that while rendering such services, the service provider has not made available technical knowledge, know-how, skill etc. Therefore, payment would not qualify as FTS. On a perusal of the aforesaid decision of the Coordinate Bench, it is observed that the nature of services provided by Bombardier Transportation Canada were far wider in scope than the services provided by the assessee. However, on examining the facts the Tribunal having found that the make available condition has not been satisfied, treated the payments not be in the nature of FTS. The departmental authorities have failed to factually establish through cogent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess common in all these appeals, are, the assessee is a non-resident corporate entity incorporated under the laws of Singapore and is a tax resident of Singapore. The assessee is a part of Bombardier Transportation group and is stated to be engaged in transportation business and provides full range of transportation equipments. The Bombardier Transportation group had entered into different contracts with Delhi Metro Rail Corporation ( DMRC ). The Bombardier Transportation group has different departments/hubs, such as, Mainline Metros (MLM), Rail Control System ( RCS ) and Propulsion ( PPC ). Under the MLN hub, BTIL is engaged in manufacturing/supply of coaches and bogies for metro trains. Under RCS, BTIL is engaged in supply and installat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not convinced with the submissions of the assessee. After examining the nature of services provided by the assessee and other details, the Assessing Officer was of the view that not only the services rendered qualify as managerial/technical/consultancy services, but while rendering such services, the assessee has also made available technical knowledge, know-how, skill etc. to BTIL. Thus, he concluded that the receipts are in the nature of FTS, both under the provisions of the Act as well as under India Singapore DTAA. Being aggrieved with the decision of the Assessing Officer, the assessee preferred appeals before learned first appellate authority, however, the assessee was unsuccessful in its attempt. 6. Before us, learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct tax at source on similar nature of payments made to another group entity in Canada providing identical nature of services, the Tribunal has held that since the nature of services provided do not make available any technical knowledge, know-how, skill etc. to the service recipient, the receipts would not qualify as FTS. Thus, he submitted, due to parity of facts between the case of the assessee and cases decided by the Tribunal, the issues arising in these appeals are squarely covered. Without prejudice, he submitted that due to non- fulfillment of make available condition, the receipts do not qualify as FTS. For such submission, he relied upon a number of other decisions. 8. Learned Departmental Representative strongly relied upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inuous improvement), marketing and sales, bids, engineering, quality, procurement, project management, program management etc. Such services are provided and received on cost to cost basis. 11. It is observed, another group entity i.e. Bombardier Transportation Sweden has provided similar nature of services to BTIL under a different agreement. In case of Bombardier Transportation Sweden, the departmental authorities, being of the view that the services rendered qualify as FTS, brought it to tax. When the issue came up before the Tribunal, it was held that since, in course of rendition of such services, the assessee had not made available any technical knowledge, know-how, skill etc. to BTIL the fees received would not qualify as FTS unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, the assessee has made available technical knowledge, know-how, skill etc. to BTIL so as to enable BTIL to employ/use such technical knowledge, know-how, skill etc. independently without the aid and assistance of the assessee. 14. That being the factual position emerging on record, in our considered opinion, the receipts would not qualify as FTS under Article 12(4)(b) of the tax treaty. Therefore, we conclude that the additions made by the Assessing Officer treating the receipts as FTS are unsustainable. Grounds raised on the issue are allowed. 15. In ITA No. 6724/Del/2017, the assessee has raised one more ground relating to levy of interest under section 234D of the Act. 16. Having considered rival submissions, we direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
