9911796707
TMI Blog2025 (2) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the Appellant' in the computation sheet - AO is directed to verify the claim of the assessee and to modify the tax computation as per law. X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. That the AO/DRP have failed to appreciate the true nature of the services rendered by the Appellant in India and have erroneously characterized HR Consultancy services as marketing and business development services. 12. That the AO erred in levying interest under section 234A and 234B of the Act in the computation sheet annexed with the Assessment Order. 13. That the AO erred in short-granting of credit of Tax Deducted at Source to the extent of INR 82,722 in the computation sheet annexed with the Assessment Order. 14. That the AO erred in making an incorrect adjustment on account of 'recovery of refund already issued to the Appellant amounting to INR 1,00,79,539 in the computation sheet annexed with the Assessment Order. 15. On the facts and circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 274 read with section 270A of the Act." 3. Ground No. 1 and 2 are general in nature and therefore, same are dismissed. 4. Ground No.3 is not pressed by the assessee; hence, the same is dismissed as not pressed. 5. Brief facts of the case:-The assessee company is incorporated under the laws of USA and is engaged in the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r lines of business i.e. Consulting, Digital, Executive Search and RPO & Professional Search. During the subject AY, the assessee has rendered following key solutions to its clients in India and have received service fee amounting to INR 88,134,162: * Organisational Strategy: Consulting services for outlining effective talent mapping strategy and assistance in outlining organisational structure to help convert clients' plan into action. * Assessment and Succession: Consulting services for carrying talent assessment, by comparing the clients' needs with the talent they have and talent they need, and outline strategy to help close the gap between the two. * Talent Acquisition: Consulting services for attracting and retention of right people across all functions / levels. * Leadership and Professional Development: Consulting services in relation to leadership and professional development. * Rewards and Benefits: Consulting services to help organisations evaluate their reward (such as compensation, ESOPs, etc.) and payment structure from talent retention standpoint. The copy of invoices in relation to rendition of such services, on sample basis, are enclosed as An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DAO has clearly established that the services rendered by the assessee are provided by the employees of the assessee who are having technical knowledge, experience and skills in their respective files. Each components of the activities is complex and intricate that these cannot be understood or performed by a layman or a person with limited knowledge/ skills. None of these services can be provided by a person who does not possess technical training. Further, it is evident that the services provided by the assessee are customized to suit the needs of the customer. The customer gain the technical knowledge of resolving that issue in future independently and do better performance. The services provided by the assessee enable them in a way that if the issue comes up again, they can solve it on their own. The assessee is helping, guiding Indian customers in various strategic decision making related to their businesses. These activities do enable the customers of the assessee to better equip themselves with technical knowledge, experience, skill, knowhow or processes in respect of the services rendered by the assessee. In view of the above, panel finds no fault with the AO's argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia USA DTAA. The relevant extract of the order is reproduced hereunder:- 13. Heard the arguments of both the parties and perused the material available on record. 14. The relevant extract of India-USA DTAA is as under: Article 12 of India-USA DTAA on "Royalties and Fees for Included Services" For purposes of this Article, "fees for included services" means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services: ………. (b) make available technical knowledge, experience, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. Thus, in order for a payment to qualify as FIS under the India-USA DTAA, the services should be in the nature of technical or consultancy services, and these services should "make available technical knowledge, experience, skill know-how or processes." The services which are in the nature of "technical" or "consultancy in nature and which satisfy the "make available" co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pient by the service provider so that the recipient can apply the same on his own. Further, merely because the rendering of consulting service requires any expertise by the person providing the service would not per se mean that technology has been made available to the service recipient. 16. In the instant case, the assessee has received payment for rendition of consultancy service in the field of organizational strategy, talent, reward and benefits etc. While rendering of such services, the assessee does not transmit any knowledge, skill or technical knowhow in a manner that clients/customers are able to perform the aforesaid functions in future on its own without recourse to the service providers and hence, the element of "make available" in absent in such services. The same is clearly evident from the fact that such services are rendered on continuous basis from preceding years. In the present case, assessee is merely providing consulting services such as organizational strategy, talent strategy, consulting in relation to rewards and benefits and related leadership and development consulting services for which clients / service recipients need to come back to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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