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TMI Blog2024 (10) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of the work to the employees hired/ employed or subcontracted from the above company based out in Russia. Assessee clarified that the Russian shareholder is a full-time employee with Singapore. CIT(A) had granted relief to the assessee for AY 2020-21 on the same footings in assessment year 2019-20 that receipts could be FTS, but the same does not satisfy the make available clause provided in Article 12(4)(b) of India-Singapore Treaty and hence, the receipts could be considered as only business income and since it is proved beyond reasonable doubt that the assessee does not have any permanent establishment in India during the year under consideration, the same cannot be taxed in India. None of these factual findings could be controve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the Laws of Singapore. The assessee is engaged in the business of providing technical non-invasive inspection and integrity assessment/scanning of off-shore pipelines under the sea or surface. The company has developed a system of non-invasive survey of pipeline inspection and its integrity called as Magnetic Tomography Method (MTM) technology. This technology is used for inspection and integrity assessment of Oil and Gas pipelines. The assessee is a Non-Resident Company having no permanent place of business in India in terms of the provisions of the Income Tax Act, 1961. It was submitted that since the assessee is a tax resident of Singapore, it would be entitled for beneficial provisions of Double Taxation Avoidance Agreement ( DTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erience, skill, know-how or processes which enables the person acquiring services to apply the technology contained thereon. Hence, even if the amounts received are considered as FTS, it does not fulfill the make available clause provided in the India-Singapore Treaty. The assessee also clarified that the services rendered by assessee company in India are technical non-invasive inspection and integrity assessment/ scanning offshore pipelines under the sea or surface. The ld AO further disregarded the aforesaid contentions and proceeded to treat the entire receipts as taxable as other income @ 40% plus surcharge plus education cess. It was submitted that the ld AO had not granted the benefit of beneficial provision of DTAA between India and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Article 4 of India-Singapore treaty, ought to have granted the beneficial provision provided in the treaty. The ld CIT(A) also took cognizance of the fact that the assessee had indeed furnished Form 10F confirming the fact that it does not have any permanent establishment in India. This fact has not been controverted by the ld AO in the remand report. The ld CIT(A) observed that the ld AO had treated the receipts earned by the assessee as other income in terms of Article 23 of India-Singapore Treaty. The ld CIT(A) categorically observed that the services rendered by the assessee are technical in nature and hence, it apparently falls within the ambit of fee for technical services (FTS). But the same does not satisfy the make available cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxability of receipts as FTS as per Explanation 2 to Section 9(1)(vii) of the Act as stated supra. The ld AO had not taxed the receipt as FTS, instead had taxed the same as other income in terms of Article 23 of the treaty. Hence, the grounds per se deserve to be dismissed as not emanating from the orders of the lower authorities. Accordingly, we do not find any infirmity in the order of the ld CIT(A) in granting relief to the assessee. Hence, grounds raised by the revenue are dismissed for assessment year 2019-20. 10. We find in AY 2020-21, the ld AO had taxed similar receipt as fee for technical services. The ld AO even queried the assessee on Limitation of Benefit (LOB) clause provided in the treaty. In response thereto, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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