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TMI Blog2024 (9) TMI 1623X X X X Extracts X X X X X X X X Extracts X X X X ..... red or developed the commercial information. Undisputedly in the instant case the technical skill, expertise or technical know-how used in preparing the commercial information was not made available to the assessee and hence the remittance made by the assessee for obtaining such commercial information cannot be called to be the 'fees for the included services to make it chargeable to tax in India. ' Make available clause is not satisfied, as erroneously held by the DRP We are of the considered view that clearly, these services are merely support services dealing with installation and integration and when the primary services themselves are not taxable as FTS, these ancillary services qua the primary services cannot be taxed as FTS. Reliance is rightly placed by Ld. AR on decision of TSYS Card Tech [ 2023 (4) TMI 1088 - ITAT DELHI ] and Net B.V [ 2017 (7) TMI 420 - ITAT DELHI ] wherein it is held that installation and integration services are support services and not taxable as FTS. Appeal of the assessee is allowed. - Dr. B.R.R. Kumar, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Shri Nishank Vashistha, Advocate For the Revenue : Shri Abhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider the same to be quite relevant and reproduce the same below, as this example 7 reads as follows: Facts: The Indian vegetable oil manufacturing firm has mastered the science of producing cholesterol free oil and wishes to market this product worldwide. It hires an American marketing consultancy firm to do computer simulation of the world market for such oil and to advise it on marketing strategies. Are the fees paid to the US company for included services? Analysis: The fees would not be for included services. The American company is providing a consultancy which involves the use of substantial technical skill and expertise. It is not, however, making available to the Indian company any technical experience, knowledge or skill, etc., nor is it transferring a technical plan or design. What is transferred to the Indian company through the service contract is commercial information. The fact that technical skills were required by the performer of the service in order to perform the commercial information does not make the service a technical service within meanings of para (4)(b). 15. Clearly, commercial information/output from a technical application does not constitute FIS as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... users, said end user cannot be said to have been enabled for any enduring benefit. In present case, this test is not satisfied by any stretch as the contract is limited only to grant of access to the software during the subscription period and on the expiry of the subscription period, the access to the software gets terminated and the customer content also stands deleted. 19. The concept of make available as applicable to FTS, is now quite crystilised and we rely upon the findings of Hon ble Karnataka High Court in the case of De Beers India Minerals (p.) Ltd. ITA 549 to 551 of 2007, where in the facts were quite similar as in that case the assessees entered into an agreement with M/s Fugro Elbocon B. V. Netherlands (hereinafter referred to as 'Fugro'). Fugro had a team of experts who are specialized in performing air borne geophysical services for clients, process the data acquired during the survey and provide necessary reports. The services are engaged to conduct the air borne survey for providing high quality, high resolution, geophysical data suitable for selecting probable kimberlite targets. For the technical services rendered by them the assessees had paid considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of data to the assessees, which the assessee can apply independently and without assistance and undertake such survey independently excluding Fugro in future. The Fugro has not made available the aforesaid technology with the aid of which they were able to collect the data, which was passed on to the assessees as a technical service. In other words, Fugro has rendered technical service to the assessees. They have not made available the technical knowledge with which they rendered technical service. There is no transmission of technical knowledge, expertise, skill, etc., from Fugro along with technical services rendered by them. The assessees are completely kept in dark about the process and the technologies which the Fugro adopted in arriving at the information/data which is passed on to the assessees as technical service. The assessee is unable to make use of the said technical knowledge by itself in its business or for its own benefit without recourse to Fugro. In fact, the question whether along with rendering technical services, whether the technical knowledge with which that services was rendered was also made available to the assessees/customers is purely a question of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices of Fugro which is expert in the field. By way of technical services Fugro delivered to the assessee the data and information after such operations. The said data is certainly made use of by the assessees. Not only the said data and information was furnished in the digital form, it is also provided to the assessees in the form of maps and photographs. These maps and photographs which were made available to the assessees cannot be construed as Technology made available. Fugro has not devised any technical plan or technical design. Therefore the question of Fugro transferring any technical plan or technical design did not arise in the facts of these cases. The maps which are delivered are not of kind of any developmental activity. As such, earlier the information which is furnished to the assessees by way of technical services in the digital form is also given in the form of maps. Therefore the case on hand do not fail in the second part of the aforesaid clause dealing with development and transfer of plans and designs. Therefore the second substantial question of law is also answered in favour of the assessees and against the Revenue. 20. Reliance is also placed on decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Information available on the website of the assessee company gets substantiated with the clauses of the agreement and bring out the actual nature of services provided by the assessee company. It also reveals that the professional services being provided are not any ancillary or subordinate services instead they are very sophisticated services which are separately solicited by customers through a separate Order Form ( Professional Services ) and these services primarily involve supporting the implementation of Mixpanel's software development kit into Customer s software and integration of Customer Content with and into the Application Services which by no means are ancillary/ subordinate services. It is also observed that the assessee is storing and utilising the customer data, mentioned in the draft order. 3.2 We are of the considered view that clearly, these services are merely support services dealing with installation and integration and when the primary services themselves are not taxable as FTS, these ancillary services qua the primary services cannot be taxed as FTS. Reliance is rightly placed by Ld. AR on decision of Coordinate Bench in TSYS Card Tech v/s DCIT ITA 2006/D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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