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TMI Blog2024 (8) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Whether on the facts and in circumstances of the case the learned CIT - A) erred in holding that the services rendered under the Supply planning services is not falling within the purview of royalty under para 3 (a) and fees for technical services under para 4 (a) and Para 4 (c) of the Indo UK treaty. The learned CIT - A has held that SOC contract (2005 - 2008) and SOC contract 2008 - 11) are separate, whereas the assessing officer brought has brought out in the order that the services rendered before and after the two sets of agreement were one and the same. ii. Whether on the facts and in circumstances of the case the learned CIT (A) erred in holding that the services rendered under the SPS is not falling within the purview of royalty under para 3 (A) and FPS under para 4 (a) and Para 4 (C) of the Indo UK treaty despite the fact that assessee during the assessment proceedings as well as the DRP proceedings had not made a claim to this effect and this was nothing but an afterthought arising during the appellate proceedings wherein the difference in the SOC agreement for the period 2005 - 07 and 2008 - 11 were raised. iii. Whether on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offer and delivery schedules. They are based in United Kingdom. 5. On the basis of these services the learned assessing officer held that the services provided are value-added services provided in earlier years. The dispute resolution panel for assessment year 2007 - 08, 2008 - 09 and 2009 - 10 has upheld treatment of value-added services as fees for technical services and taxed them at the rate of 10%. Thus, even the coordinate bench for assessment year 2007 - 08 and assessment year 2008 - 09 has upheld taxability of such value-added services receipt as fees for technical services and royalty. The AO was also of the view that in the group concern of the assessee de Beers global sight holders sales Pty Ltd the activity and operations are identical, and the income has been offered for taxation under fees for technical services so it can be clearly inferred that the assessee's claim of that such services are not fees for technical services is not tenable. Therefore, the learned assessing officer held that the supply running services receipt of Rs. 536,843,276 falls under the head of fees for technical services and royalty and taxed accordingly. According with that draft assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that:- "44. We are in agreement with the contention of the ld. Counsel. Firstly there is no make available of any services of technical knowledge as held above and also this extranet is merely a platform to provide information to the sight holder. It is nothing but a website that that allows controlled access to partners, vendors and suppliers or an authorised set of customers normally to a subset of the information accessible from an organization's intranet. Thus, no technical service was provided to sight holders for providing access to the extranet. Thus, this reason given by the AO is rejected. 45. Regarding taxability under Article 13(3), i.e., Royalty, it has been submitted that assessee communicates in advance to every sight holders the aggregate value of each Box it intends to make available to the sight holders during the selling period, categorized by box and by sight (referred to as Intention to Offer). It mainly consists of provision of consistency of boxes, provision of extranet, provision of key account manager. Now, whether intention to offer amounts to 'Plan' and thereby, covered in the scope of Royalty as held by the AO, the submission of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave provided undertaking to the assessee that logo should be used only for the specific purpose. In any case, the fees earned by the assessee are through provision of SPS services and not through the use of trademarks which are having from clause 6 of conditions for the Supply of Planning Services and the Service Fee are reproduced as under for ease of reference: 2.1. The DTC will provide the Services to Sightholders on the terms and conditions set out therein..... 2.2. The services offered by the DTC and as set out in Appendix A may be varied by the DTC from time to time in its sole and absolute discretion. 2.3. Sightholders shall pay the Service Fee for the Services. The Service Fee relates to the ITO and will comprise a flat rate charge calculated, separately for each Sight at each Sight location, with regard to the aggregate price of boxes purchased by the relevant Sightholder (or Sightholder group member) at each Sight at each such Sight location during the relevant 12 month Selling period ITA No.6509/Mum/2016 and other appeals M/s. De Beers UK Ltd 38 Thus, fees earned for providing SPS services can not be treated as fees earned through the use of logo/ trademark which can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight holder with regard to its intention to offer via the extranet, which is merely a means of secured communication between assessee and its sight holders. Before us reliance was placed on the decision of GEC GECF Asia Limited (ITA No 8922/Mum/2010) wherein the term industrial, commercial or scientific experience has been discussed, wherein it was observed and hold as under:- "11. The thin line distinction which is to be taken into consideration while rendering the services on account of information concerning industrial, commercial and scientific experience is, whether there is any imparting of knowhow or not. If there is no "alienation" or the "use of" or the "right to use of any knowhow i.e., there is no imparting or transfer of any knowledge, experience or skill or knowhow, then it cannot be termed as "royalty" The services may have been rendered by a person from ITA No.6509/Mum/2016 and other appeals M/s. De Beers UK Ltd 40 own knowledge and experience but such a knowledge and experience has not been imparted to the other person as the person retains the experience and knowledge or knowhow with himself, which are required to perform the services to its clients. Hence, in such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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