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| The Tax Publishers2019 TaxPub(DT) 1268 (Kol-Trib) INCOME TAX ACT, 1961
Section 90
As service recoverd by subsidiaries based at UK' singapore were simple marketing services of introducing foreign institutional investors to invest in capital markets in India so that assessee would improve its buisness and income in India. No technical knoweldge was being made available to the assessee by its subsidiaries and as a result, payments made to subsidiaries would not fall within the definition of fees for technical services.
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Double taxation relief - Agreement between India and UK/Singapore - Fee for technical services - Payments towards marketing support services
Assessee, a stock-broker company claimed deduction of made payments to subsidiaries based at UK and Singapore towards providing marketing support services for clientele in U.K. and Singapore. AO treated the payments as in the nature of fee for technical services (FTS) and accordingly, disallowed deduction for want of TDS under section 195.Held: In terms of Article 12(4)(b) of Singapore India-DTAA and article 13(4)(c) of Indo-U.K. DTAA any consideration paid for managerial, technical or consultancy services would be covered under definition of fee for technical services only if such services make available any technical knowledge, experience, know-how or processes. In the instant case, services rendered by subsidiareis to the assessee were simple marketing services of introducing foreign institutional investors to invest in capital markets in India so that assessee would improve its buisness and income in India. No technical knowledge was being made available to the assessee by its subsidiaries and as a result, payments made to subsidiaries would not fall within the definition of fees for technical services.
Relied:GE India Technology Cen. (P) Ltd. v. CIt (2010) 327 ITR 456 (SC) : (2010) 193 Taxman 234 (SC) : 2010 TaxPub(DT) 2241 (SC).
REFERRED : Raymond Ltd. v. Dy. CIT (2003) 86 ITD 791 (Mum-Trib) : 2003 TaxPub(DT) 0237 (Mum-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, KOLKATA BENCH
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