GE ENGINE SERVICES LLC,GURUGRAM vs. ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI

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IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘D’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER IT(IT) A No. 1142/Del/2025 ( A.Y 2022-23)

GE Engine Service LLC Vs Assistant Commissioner of C/o. 1st Floor, Building-7A, Income Tax, Circle Standard Chartered Building, International Taxation 1(3) (1), DLF Cyber City, Phase-III, Civic Centre, Minto Road, New Gurugram, Haryana 122002 Delhi PAN: AADCG1809R (RESPONDENT) (APPLICANT) Appellant by Sh. Ravi Sharma, Adv & Ms. Kashish Gupta, CA Respondent by Sh. M. S. Nethrapal, CIT DR Date of Hearing 06.04.2026 Date of Pronouncement 15.04.2026 ORDER PER YOGESH KUMAR, U.S. JM: This appeal is filed by the assessee pertaining to Assessment Year 2022-

23 against the Final Assessment order passed under Section 143(3) r.w.

Section 144C (13) of the Income Tax Act, 1961 (‘Act’ for short) by the

Assistant Commissioner of Income Tax Appeal, Circle International

Taxation 1(3)(1), dated 30/12/2024.

in the present Appeal is square covered in Assessee’s own case for AY

2021-22 vide order dated 11/03/2206 passed by the Tribunal in ITA No.

3700/Del/2023, thus sought for allowing the appeal.

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Authorities sought for dismissal of the appeal.

consideration, A.O/DRP followed the order passed in Assessee’s own case

for AY 2021-22 while framing impugned Final Assessment Order dated

30/12/2024. However, the Co-ordinate Bench of the Tribunal for A.Y

2021-22 in ITA No. 3700/Del/2023, vide order dated 11/03/2026,

decided the said issue involved thereon on both counts i.e. treaty

eligibility and taxability of impugned receipts in following manners:

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or exchanged, refurbished parts was transferred to the customers outside India. For such services, the assessee had received a sum of Rs. 471,64,50,980/- from different airline companies which was taxed by the AO @ 10% as Fees for Technical services under section 9(1) (vii) of the Act as well as per Article 12 (4) (b) of India-USA DTAA.

13.2 There is no dispute to the submissions of the assessee that as per provisions of section 90(2) of the Act, that the assessee being a non-resident has the option of being taxed in India under provisions of the Act or provisions of the DTAA entered between India and the country of residence of such non-resident, whichever is more beneficial and accordingly, the Assessee’s claim for availing the beneficial ITA 3700_DEL_2023_GE Engine Services Ltd 45 provisions of the India-US DTAA is justified and acceptable. Relying upon Article 12 (4) (b) of INDIA-USA DTAA the assessee submitted that the receipts from repair and overhaul support received from Indian customers were not taxable in India as the condition of ‘make available’ as laid down in Article 12 (4) (b) of INDIA-USA DTAA was not satisfied.

13.3 In this regard, the relevant provisions of Article 12(4) of India- US DTAA are reproduced as under :

“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 : a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received ; or (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.”

13.4 Under the present factual matrix, the submission of the Assessee that it was not providing any ancillary or subsidiary services as described under para (a) and therefore, it is required to be seen if these services fall under sub-para (b) above is acceptable. In this regard from a reading of clause (b), it can be reasonably inferred that technical or consultancy services would fall under FIS only if they make available technical knowledge, experience, skill, know-how, or processes or consist of the development and transfer of a technical plan or design to its Indian customers in this case. As stated above the assessee submits that it did not make available

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technical knowledge, experience, skill, know-how, or processes or consist of the development and transfer of a technical plan or design to its Indian customers from whom amount of Rs. 471,64,50,980/- was received during the year. In this regard the assessee also relied upon the two orders of the coordinate bench of the Tribunal in the case of Pratt & Whitney Canada Corp. v. DCIT (supra) and Rockwell Collins Southeast Asia Pte Ltd vs DCIT (supra)

13.5 We notice that in the case of Pratt & Whitney Canada Corp. v. DCIT (ITA No. 665/DEL/2025), the Assessing Officer passed draft assessment order under section 144C(1) of the Act on 23.03.2024 and held that the payments received from the Indian customers on account of repair, maintenance and related services of aircraft engineering amounting to Rs. 242,65,46,501/- is taxable income of the assessee as Fees for Technical services (‘FTS’) under the provisions of section 9(1)(vii) of the Act and under the provisions of India-Canada DTAA. The Assessing Officer in the cited case noted that the assessee had received the following receipts from its Indian customers. Sl Nature of Amount (in Taxability No. Income INR.) in return of income filed Income from 2,36,18,82,958 None repair and taxable maintenance of aircraft engines Sale of 1,38,86,712, publications in relation to aircraft engines Receipts from 12,86,000 engineering services Support services 4,01,103/- in relation to aircraft engine Total 2,37,74,56,773 receipts declared in the return of income filed

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13.6 The assessee submitted before the AO in the cited case that the assessee had claimed receipts from aforesaid services as non- taxable while filing return of income for the subject year on the ground that since the services of repair, maintenance, publication, engineering and support services resulting in income of Rs. 2,37,74,56,773/- did not “make available” any technical knowledge, skill, knowhow or process or consisted of the development and transfer of a technical plan or technical design, the same did not qualify as Fees for Technical Services (‘FTS’) as per the provisions of India-Canada Double Taxation Avoidance Agreement (‘DTAA’).

13.7 The Tribunal after examining the entire facts and the India- Canada DTAA held that the AO had not been able to establish that a technical knowledge was ITA 3700_DEL_2023_GE Engine Services Ltd 48 transferred to the customers to make them self-sufficient/ reliant in using the technology and that the customer had derived an enduring benefit and utilised the knowledge or know-how on his own in future without the aid of the service provider. The relevant findings of the order of the Tribunal are reproduced as under:

“17. We have heard the rival submissions and have carefully perused the materials on record. The issue before us to be adjudicated is the taxability of receipts from Indian customer on account of repair and maintenance on aircraft engines to be treated as FTS under the India-Canada DTAA and the India- Singapore DTAA. We find that both the India Canada DTAA and the India -Singapore DTAA have the “make available” clause to be complied with for the receipts being treated as FTS.

Article 12(4)(b) of India-Canada DTTA provides as follows: Article 12.4. For the 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:

(a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or

(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.

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(a) for services that are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of property other than a sale described in paragraph 5(a);

(b) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships or aircraft in international traffic;

(c) for teaching in or by educational institutions;

(d) for services for the personal use of the individual or individuals making the payment; or (e) to an employee of the person making the payments or to any individual or firm of individuals (other than a company) for professional services as defined in Article 14. Similarly, the India-Singapore DTTA defines FTS similarly as follows: Article 12 (4). The term "fees for technical services" as used in this Article means payments of any kind to any person in consideration for services of a managerial, technical or consultancy nature (including the provision of such services through technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received ; or (b) make available technical knowledge, experience, skill, know-how or processes, which enables the person acquiring the services to apply the technology contained therein ; or (c) consist of the development and transfer of a technical plan or technical design, but excludes any service that does not enable the person acquiring the service to apply the technology contained therein.

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“14. In CIT v. De Beers India Minerals P. Ltd.: (2012) 346 ITR 467, the Karnataka High Court had explained the import and meaning of ‘make available’ as used in Article 12(4) of the India USA DTAA as under:

“21. What is the meaning of "make available". The technical or consultancy service rendered should be of such a nature that it "makes available" to the recipient technical knowledge, know-how and the like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words, to fit into the terminology "making available", the technical knowledge, skills, etc., must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered "made available" when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does not mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available. In other words, payment of consideration would be regarded as "fee for technical/included services" only if the twin test of rendering services and making technical knowledge available at the same time is satisfied.”

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technical knowledge, experience, skill, know-how or processes. As has been found by the Tribunal, the access to the database did not constitute the rendering of any technical or consultancy services and in any case did not amount to technical knowledge, experience, skill, know- how or processes being made available.

14.1. Notably, this aspect is adverted to in paras 17 to 23 of the impugned order. For convenience, the relevant paras are extracted hereafter:

‘A perusal of the aforementioned provision shows that in order to qualify as fees for technical services, the services ITA 3700_DEL_2023_GE Engine Services Ltd 52 rendered ought to satisfy the “make available” test. Therefore, in our considered opinion, in order to bring the alleged managerial services within the ambit of fees for technical services under the India-USA Double Taxation Avoidance Agreement, the services would have to satisfy the “make available” test and such services should enable the person acquiring the services to apply the technology contained therein agreement is effective from 1-1-2009 and we are in Assessment Years 2018 2019 and 2019-2020. In our considered opinion, if the assessee had enabled the service recipient to apply the technology on its own, then why would the service recipient require such service year after year every year since 2009? This undisputed fact in itself demolishes the action of the assessing officer/Dispute Resolution

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Panel. The facts on record show that the recipient of the services is not enabled to provide the same service without recourse to the service provider i.e. the assessee. In our humble opinion, mere incidental advantage to the recipient of services is not enough. The real test is the transfer of technology and on the given facts of the case, there is no transfer of technology and what has been appreciated by the assessing officer/learned Commissioner of Income Tax (Appeals) is the incidental benefit to the assessee which has been considered to be of enduring advantage. In our understanding, in order to invoke make available clauses, technical knowledge and skill must remain with the person receiving the services even after the particular contract comes to an end and the technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider.’ (emphasis is ours) We tend to agree with the analysis and conclusion arrived at by the Tribunal.”

“3. The assessee is a non-resident, TRC holder of USA primarily engaged in the business of providing services in the nature of repair & maintenance of aircraft equipment. (emphasis supplied)

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handling the issues related to break down of aircraft. It is a complete and separate science and art in itself. The services provided by way of repair and maintenance are technical in nature and fall under ambit of services under Fee for Technical Services. As discussed above, once it is established that the services which have been provided are specialized customer-based services, what remains to see is whether they pass the test of make available or not under India USA DTAA. Interpretation of make available clause will differ with specific areas of the services under consideration. For instance, interpretation of make available for a concern providing services for the agricultural sector vis-à-vis education sector would be vastly different from each other. In the same way interpretation of make available is different for a concern engaged in providing services revolving around a highly specialized sector such as Aircraft industry. The make available clause deals with not only making available technical knowledge or know-how or processes or consist of the development and transfer of a technical plan or technical design but also deals with imparting experience and skill. Within the make available clause itself the enduring benefit would be different for all the items mentioned in it for example the enduring benefit of a technical design or know-how cannot be same as enduring benefit coming from imparting of skill or experience. In the former case enduring benefit will outlive the enduring benefit brought in by the latter. In case of assessee company, the enduring benefit and make available fall under skill/experience which is shared by assessee company with its customers. Both the parties in these service transactions are engaged in highly specialized work which can be rendered and availed by them only and once the skill/experience is rendered, it continues to give benefit until required again. When it comes to services rendered as skill and experience, the make available and enduring benefit, will almost always have a comparatively short shelf life in this context. This being the case, it cannot be ignored that the make available clause and enduring benefits are satisfied and the service is not of the nature which is so highly technical and specialized that it should be taxed as Fee for Technical Services.”

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the provisions of the Act as the entire repair and maintenance of helicopter parts was carried out outside India and nothing was done in India by the nonresident payees.

“18. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Undisputedly, in the assessment years under dispute, the assessee had made payments to certain non-residents towards repair and maintenance of helicopter parts. As per the process followed by the assessee for repair and maintenance, it’s engineering department identifies helicopter parts required for or are due for maintenance/overhaul in terms with DGCA guidelines. Once the engineering department identifies the helicopter parts required for maintenance/overhaul, it puts up a request to the Procurement Department. On receipt of request, the Procure Department issues repair orders and sends the parts to be repaired to the respective non-resident entities, who undertake the repairing/overhauling of such parts. On receipt of such repair order and parts, the nonresident entities issue an estimate/quote of charges for repair and maintenance work. On approval of such estimate/quote by the Procurement Department, the non-resident companies undertake necessary repair and maintenance work of the said parts. After repair/overhaul, the non-resident entities send the repaired parts/item along with invoices for repair and maintenance work carried out. On receipt of the invoices and helicopter parts, the assessee makes the payments after taking necessary declaration and documents from the non resident entity.

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It is further evident, to support its contention that there was no requirement for deduction of tax at source as the income of the non-residents are not taxable in India, the assessee had furnished the details of maintenance/repair, sample copies of invoices, sample copies of airway bills evidencing that the parts of the helicopters were sent outside India for carrying out necessary repair and sample copies of Form 15CB and 15CA etc. The Assessing Officer, however, held that the services rendered by the non residents are technical and consultancy in nature, hence, quantifies as FTS requiring withholding of tax under section 195.

i. In the first category USA, UK, Australia, Canada and Singapore are placed since the definition of FTS under these treaties are more or less identical and contain make available condition to qualify as FTS. (emphasis supplied by us)

ii. In the second category countries like, Netherlands, Spain and France can be put in as the definition of FTS in treaties are wider in scope and do not contain make available clause. iii. In the third category UAE can be put as in the treaty with UAE there is no provision concerning FTS.

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oг helicopters (PWCC main products) and hence, customers purchasing an aircraft will necessarily purchase PWCC's engine. The customer acquires title to the engines from the aircraft manufacturer, not from PWCC and generally the repair and maintenance plan with PWCC is decided at the time of sale of engine along with the aircraft to the customers. Under the repair and maintenance services, company offers customers two options for maintenance: (i) enrolling in a Pay Per Hour (PPH) program/maintenance plans or (2) independent repairs as and when required.

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13.8 Similarly, the co-ordinate Bench of the Tribunal in the case of Rockwell Collins Southeast Asia Pte Ltd v. DCIT (ITA No. 2409/Del/2023) wherein Ground Nos. 4 and 5 raised by the assessee are with regard to taxability of Rs. 12,78,69,526/- received towards repairs and maintenance services rendered by the assessee. The details of the said receipts are reproduced as under: Nature of Amount Taxability Comment income (in Rs.) Repair 12,78,69,526/- Non-taxable In dispute services for under the Act as aircraft well India equipment Singapore tax treaty

13.9 The relevant findings of the Tribunal in this case in Para No. 6 to 12 are reproduced as under :

“ 6. We have heard the rival submissions and perused the material available on record. Assessee is a company established under the laws of Singapore and is engaged in providing repair and maintenance services of aircraft equipment to Indian customers. For the captioned year, the assessee filed its return of income on 13 January 2021 declaring total income as NIL. The assessee claimed credit of the entire taxes deducted at source ('TDS') of Rs. 76,08,630/- as refund during the subject year. During the year under consideration, the Assessee has earned following receipts from Indian customers:- Nature of Income Amount (in Rs.) Comment Taxability Repair 12,78,69,526/- Non taxable In dispute services for under the Act aircraft as well India equipment Singapore tax treaty Income from HR 4,65,72,618/- Not in consulting and e- dispute business (information technology) services

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Step 1: Intimation of need for repair and maintenance services by the customer Step 2: Customer sends the aircraft equipment to the designated facility of the Assessee in Singapore Step 3: On receipt of the equipment, the Assessee evaluates repairs to be undertaken, provides estimate to customer for their approval Step 4: Post receipt of the customer‟s approval, the Assessee performs necessary repairs at the designated facility Step 5: Post completion of repairs at the designated facility in Singapore, the Assessee informs the customer and confirms the place of delivery to ship back the equipment.

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repair and maintenance services are in the nature of „technical and consultancy services‟ since the solution provided by the assessee through a automated process by using of data provided by the customers involved special knowledge. The assessee raised an objection that services are rendered outside India. The ld AO buttressed this argument of the assessee by observing that place of rendition of service is not important as long as the services are utilized for a business or profession carried on in India. The ld AO also observed that income of the recipients would be chargeable to tax in the country where the source of payment is located i.e. where the buyer is located. In support of this proposition, he relied on the decision of the Hon'ble Supreme Court in the case of GVK Industries reported in 332 ITR 130 (SC). The ld AO also observed that the repairs and maintenance services were made available to the Indian customers so that they can use it independently without the support of the assessee. The equipments/ parts are essential parts of an aircraft and due to lack of technical expertise in India, the equipments are sent to Singapore for technical repair and maintenance. Once the parts are sent back to customer in India, the client is equipped to use that part and fly the aircraft. Unless, the Assessee does not „make available‟ the required technology to the client in India, it is not possible for the Aircraft clients to operate those aircrafts. In addition to repair and maintenance agreement, both the parties also exchange the proprietary information. There are restrictions placed on both the parties to prevent the use or the disclosures to any person outside the organization of all the data received i.e. the Assessee is sharing „secretive and confidential‟ data with the customers in India which signifies that technical know-how and information is being „made available‟ to the clients in India. 9. The assessee vehemently pleaded that the revenues earned by it on account of repairs and maintenance of aircraft equipment do not constitute payment for „technical services‟ as defined in Explanation 2 to section 9(1)(vii) of the Act ; and that the repairs and maintenance services are routine maintenance services and not technical services as per the Act. The assessee placed reliance on the decision of the coordinate bench decision of this Tribunal in the case of Global Vectra Helicorp Ltd

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reported in 159 taxmann.com 282 (Del Trib) wherein it was held that the since the entire repairs and maintenance of Helicopter parts was carried out outside India and nothing was done in India, the payment in the nature of repair and maintenance services is not chargeable to tax in India in the hands of the non- resident. Admittedly, in the instant case, the assessee is a tax resident of Singapore and hence, the revenues earned thereon would not be chargeable to tax under the Act. The assessee also placed reliance on the decision of the Delhi Tribunal in the case of DLF Ltd Vs. ITO reported in 111 taxmann.com 214 (Del Trib) wherein that assessee made payment to UK based company for aircraft maintenance which was in nature of routine repairs and maintenance and the same would not fall under the category of FTS u/s 9(1)(vii) of the Act. It was also pleaded that the expression „technical repairs‟ are different from „technical services‟ and reliance was placed on the decision of the Hyderabad Tribunal in this regard in the case of BHEL-GE-Gas Turbine Servicing Pvt. Ltd reported in 24 taxmann.com 25 (Hyd Trib). The assessee also pleaded that it has no Permanent Establishment (PE) in India. Hence, the payment received towards repairs and maintenance of aircraft would fall at best under the category of works contract constituting business receipts and in absence of PE in India, the same would not be taxable even as per the India Singapore Treaty. In support of this proposition, the assessee relied on the decision of the Mumbai 65 Tribunal in the case of DHL Air Ltd Vs. DCIT reported in 86 taxmann.com 277 (Mum Trib) wherein, it was held that services for repairs and maintenance of aircraft cannot be termed as technical services as defined in section 9(1)(vii) of the Act and rather it falls under the category of works contract as per section 194C of the Act which fact is also clarified by CBDT in its Circular No. 715 dated 08.08.1995 vide Question No. 29. Further, the assessee also submitted that co- ordinate bench of Delhi Tribunal in the case of Parasrampuria Synthetics Ltd reported 20 SOT 248 (Del Trib) held that use of services of technically qualified persons to render the services did not bring the amount paid as “fee for technical services” within the meaning of Explanation 2 to Section 9(1)(vii) of the Act. Similar decision was rendered by Delhi Tribunal in the case of

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Spicejet Ltd reported in 145 taxmann.com 622 (Del Trib). The assessee also pleaded that the services rendered by it does not make available any technical knowledge, technical plan or design which would enable the user to carry out the repairs of the aircraft on its own. Accordingly, even if the services rendered by the assessee are construed as technical services under the Act, the same could not be construed as FTS under the treaty since the same does not make available technical knowledge to enable the end user to use the same by its own. In this regard, the assessee placed reliance on the decision of Hon‟ble Karnataka High Court in the case of De Beers India Minerals Pvt. Ltd reported in 21 taxmann.com 214 (Kar HC) and decision of the Hon‟ble Jurisdictional High Court in the case of Guy Carpenters reported in 20 taxmann.com 807 (Del HC), among other decisions. However, none of the aforesaid submissions were appreciated by the ld AO and ultimately the services rendered by the assessee were construed as FTS taxable u/s 9(1)(vii) of the Act as well as under Article 12 of India-Singapore Treaty. 10. From the modus operandi operated by the assessee for rendering of repairs and maintenance services, we find that the aircraft equipments are shifted outside India for repairs. The repairs are carried out outside India. The equipment after due repairs and maintenance are shipped back to the customers in India. There is absolutely no transfer of any technology, nor technical plan or design or make available technical knowledge to the recipient of the services, which would enable the recipient to carry out repairs on its own without the assistance of the assessee. In our considered opinion, the services rendered do not satisfy the „make available‟ clause prescribed in Article 12 of India- Singapore treaty. Further, no technical knowledge, experience, skill, knowhow, technical plan or technical design was made available or transferred by the assessee to any party while rendering the said services. No representative of the assessee had come to India for rendering any services. The entire repairs and maintenance services, at the cost of repetition, are rendered only outside India. The crisis calls are attended over phone from Singapore. No training whatsoever is given by Singapore entity to the Indian representatives. Further, it is not in dispute that the

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assessee does not have any PE in India. These facts are very clear from the sample Dispatch plus Product Service Agreement entered into by the assessee with Inter Globe Aviation Pvt. Ltd which is enclosed in pages 211 to 248 of the Paper Book. The copies of the invoices raised by the assessee are enclosed in pages 261 to 264 of the Paper Book.. The ld DR before us vehemently pleaded that the ld AO had applied „source rule‟ in the instant case. She doubted the fact as to whether services per se were rendered in Singapore by the assessee. She stated that services of Airbus are rendered in France which is in public knowledge. We find that this argument to be completely absurd and devoid of merit in view of the fact that no consideration was received by the assessee from Airbus. Further, this was not even the case of the ld AO for treating the receipts as FTS in the hands of the assessee. We further find that the issue in dispute is squarely covered by the co-ordinate bench decision of the Delhi Tribunal in the case of Goodrich Corporation Vs. ACIT in ITA No. 988/Del/2024 for AY 2018-19 dated 22.08.2024 which is a sister concern of the assessee, wherein, exactly the identical issue was subject matter of consideration. For the sake of convenience, the relevant operative portion of the said order is reproduced hereinunder:- “Repairs and Maintenance Services-FTS or not 3. `The assessee is a non-resident, TRC holder of USA primarily engaged in the business of providing services in the nature of repair & maintenance of aircraft equipment. 4. Before the AO, the assessee submitted that for the purpose of repair & maintenance, the aircraft equipment are shipped outside India where they are repaired and sent back to Indian customer to India and hence they do not qualify the clause of 'make available'. However, the AO held that the on ground aircraft services provided by the assessee qualify it as 'make available'.. The Id. DRP held that "repair and maintenance services of aircraft parts is a very specialized field requiring technical expertise skill and experience at every stage. They are specific and customer based. Customer of the assessee are airlines which operate passenger and goods carrier. They are not equipped in handling the issues related to break down of aircraft. It is a complete and separate science and art in itself. The services provided by way of repair and maintenance are technical in nature and

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fall under ambit of services under Fee for Technical Services. As discussed above, once it is established that the services which have been provided are specialized customer-based services, what remains to see is whether they pass the test of make available or not under India USA DTAA. Interpretation of make available clause will differ with specific areas of the services under consideration. For instance, interpretation of make available for a concern providing services for the agricultural sector vis-à- vis education sector would be vastly different from each other. In the same way interpretation of make available is different for a concern engaged in providing services revolving around a highly specialized sector such as Aircraft industry. The make avallable clause deals with not only making available technical knowledge or know-how or processes or consist of the development and transfer of a technical plan or technical design but also deals with imparting experience and skill. Within the make available clause itself the enduring benefit would be different for all the items mentioned in it for example the enduring benefit of a technical design or know-how cannot be same as enduring benefit coming from imparting of skill or experience. In the former case enduring benefit will outlive the enduring benefit brought in by the latter. In case of assessee company, the enduring benefit and make available fall under skill/experience which is shared by assessee company with its customers. Both the parties in these service transactions are engaged in highly specialized work which can be rendered and avalled by them only and once the skill/experience is rendered, it continues to give benefit until required again. When it comes to services rendered as skill and experience, the make available and enduring benefit, will almost always have a comparatively short shelf life in this context. This being the case, it cannot be ignored that the make available clause and enduring benefits are satisfied and the service is not of the nature which is so highly technical and specialized that it should be taxed as Fee for Technical Services. " 6. From the above, we find that it could be technical services but the 'make available' clause is totally absent. The repairs & maintenance services are 'not made available' to the clients so that in future they can

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repair & maintain their own. There is no transfer of technology, no transfer of skill or knowledge or processes. There is no imparting of experience or benefit. The Id. DRP wrongly interpreted that the 'enduring benefit' gained by the client by the way of repairs & maintenance is akin to 'make available' which cannot be accepted. Rather, it should be the enduring benefit to the clients to undertake repairs & manage the maintenance services, can then only it be considered that the 'make available' clause is satisfied. Since, such 'make available' clause is not satisfied, the services cannot be treated as FTS as per India-USA DTAA. 7. The appeal of the assessee on this ground is allowed.” 12. In view of the aforesaid observations and respectfully following the judicial precedent hereinabove, we hold that the revenue earned by the assessee from rendition of repairs and maintenance services of aircraft equipment cannot be construed as FTS both under the Act as well as under the treaty. Accordingly, Ground Nos. 4 and 5 raised by the assessee are allowed. 13.10 The facts in the present case are similar to the above cited cases. In this case the Assessing Officer had added the sum of Rs. 471,64,50,980/- @10% for fees for technical services u/s 9(1)(vii) of the income tax act 1961 as well as per Article 12 (4)(b) of INDIA-USA DTAA. The AO had relied upon the decision of the Hon’ble High Court in the case of Director of Income Tax Delhi vs M/S Lufthansa Cargo India (supra) to hold that the services rendered by the assessee were in the nature of fees for technical services u/s 9(1)(vii) of the Act. 13.11 After careful consideration of the business of the assessee and considering the decision of the Hon’ble High Court in the case of Director of Income Tax Delhi vs M/S Lufthansa Cargo India (supra) relied by the AO, we are of the considered view that the revenue has an arguable case to show that the services rendered by the assessee to the airlines companies based in India are technical services within the meaning of section 9(1)(vii) of the act but in view of the discussion made later in this order, the receipts from repair and overhaul support received from Indian customers are not taxable in India as the condition of ‘make available’ as laid down in Article 12 (4) (b) of INDIA-USA DTAA is not satisfied in this case.

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13.12 Further, we note that the Assessing Officer in view of the findings as reproduced earlier in this order held that in this case the assessee had made available the technical services and thus was taxable as per the provisions of Article 12(4)(b) of the India-USA DTAA. In this regard the main findings of the AO are reproduced once again for ready reference : “The description of above services clearly brings out that the assessee as provided these services from offshore basis and it is the customer whose sole responsibility was to detect the problem related to engine, and thus assessee is helping, guiding, and assisting customer by providing technical training and sharing technical plan and data with the customer to detect the problem and take maintenance decision and these things cannot be done without sharing the technical knowledge. The assistance and guidance is provided using skill, expertise and experience of the Assessee which it gained over a period of time and have expertise in it. Thus, the Applicant is making available his technical expertise in the area to Indian customer enabling it to take better decisions and perform its functions in more effective manner The activities are completely different from activities where final solution is provided. Once these advices and training is given by the assessee, the final task is performed by Indian customer as "IT remains the sole responsibility of airline to conclusively identify and resolve aircraft and engine faults or adverse trends and make all maintenance decision affecting airlines aircraft." And these tasks cannot be performed without having technical knowledge, skill and experience and thus assessee develop and transfer of a technical plan or technical design to Indian customer, knowledge to detect the fault and take repair and maintenance decision. Indian customer becomes wiser with each advice, training and so that on that issue he can perform the task As assessee make available technical plan, workscope were prepared by mutual agreement the employees of Indian customers gain the technical knowledge of detecting and taking decision for maintainance that issue in future independently. The service provided is continuous, since new issues keep coming up every now and then. But that does not mean that service recipient does not learn from the previous work. The Assessee has acknowledged that it has

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necessary expertise and the services which are given under trademark onpoint are specialized service of GE. This knowledge and expertise also keeps getting updated and hence, the need to share it customer is on a continuous basis. As there is sharing of technical plan and data and provide training related to diagnosis, overhaul and troubleshooting as part of Onpoint engine service programme hence assessee services are in nature of fees for technical nature as per income tax act 1961 as well as per indiausadtaa article 12(4)(b).” 13.13 The above findings of the AO have been carefully perused by us but not found to be acceptable. The above findings of the AO at best shows that the engineers/ technicians working for the Indian customers may be getting wiser and learning certain skills in its interaction with the assessee but the question is whether it is on account of making available of the said skills by the assessee or it is individual skill of the person to acquire some related skills as stated by the AO. We also note that in Article 12(4)(b) of the Act India-USA DTAA it mentions to “make available” technical knowledge in other items as mentioned there in, which in our considered view is that the assessee has to “make available” the said technical knowledge with a design and with a conscious efforts and not by implication as the case has been made out by the Assessing Officer in the present case. The engineers/technicians working with the Indian customers will have a knowledge of aeronautical engineering relating to the aeroplanes which includes its engine for which they have been hired by the respective Indian companies for which they were paid. But the issue here is if the Indian customers could get their engines repaired by their inhouse engineering team then why the Indian customers would send the engines to the assessee at the service centres by paying such huge amount towards “Receipts towards repair and overhaul support”. Flying of an aeroplane is an engineering miracle but it has to observe zero error norms of safety. In this regard, Hon’ble Delhi High Court in the case of Director of Income Tax Delhi vs M/S Lufthansa Cargo India (supra) observed that there are strict guidelines to keep the aircrafts safe and airworthy because international and national domestic regulatory authorities mandate that certification of such component

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safety is a condition precedent for their airworthiness. Under these circumstances, the airlines were bound by the agreements to send its engines for repair and overhaul to the assessee. 13.14 Upon careful observations of the above findings/observations of the AO we find that the AO has not established that technical knowledge which is being utilized by the assessee for the “receipts towards repair and overhaul support” (for which the assessee has received the sum of Rs 471,64,50,980/-) is transferred to the customer to make them self - sufficient/reliant in using the technology and that the customer has derived an enduring benefit and utilized the knowledge or knowhow on its own in future without the aid of the service provider. We do not find that in the present case the technical knowledge, skills, etc remained with the customer receiving the services even if after the particular contract comes to an end. Further, the assessee in its submission before the Ld DRP for AY 2021-22 had stated that in fact, the customers continued to engage with the Applicant for such offshore work in subsequent years on an ongoing basis which has not been contested by the revenue. Thus, we are of the considered view that the requirement of “make available” clause as per the India-USA DTAA are not satisfied in the case of the assessee. We are also of the considered view that the business is not run with a charity motive in this highly competitive business environment both locally and globally and the assessee would not be sharing or make available its technical expertise to the Indian customers to lose its own business or to create a competitor for itself unless the assessee is paid for making available the said technology, which in the present case the revenue has failed to show that any amount for making available the said technology or any amount attributable towards making available of such technology was paid by the Indian customers to the assessee.

13.15 Further, as noted above in the case of Pratt & Whitney Canada Corp. v. DCIT (supra) and Rockwell Collins Southeast Asia Pte Ltd v. DCIT (supra) had considered India-Canada DTAA and India-Singapore DTAA wherein the requirement of “make available” was required to be satisfied to tax fees for technical services

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in the source country making the said payments like the similar requirement in Article 12(4)(b) of the India-USA DTAA and also on similar facts (as reproduced earlier in this order and the significant finding showing the facts similar to case of the assessee duly highlighted) the co- ordinate Bench of the Tribunal had held that the receipts on account of repair and maintenance services received by assessee was not liable to be taxed as FTS in the hands of the assessee during the subject year. 13.16 We therefore, in view of the facts as discussed above by us and relying upon the respective orders of the co-ordinate Bench in the case of Pratt & Whitney Canada Corp. v. DCIT (supra) and Rockwell Collins Southeast Asia Pte Ltd v. DCIT (supra), we hold that the receipts on account of repair and overhaul services amounting to Rs. 471,64,50,980/- received by assessee was ITA 3700_DEL_2023_GE Engine Services Ltd 76 not liable to be taxed as FTS in the hands of the assessee during the subject year and the same is deleted. Grounds no 4 to 4.5 of the appeal are allowed.

distinguish the order of the Tribunal, by following the decision of the Tribunal

for AY 2021-22 (supra) rendered in Assessee’s own case,we hold that the

receipts on account of repair and overhaul services received by Assessee in the

year under consideration is not liable to be taxed as FTS in the hands of the

Assessee and the same is deleted.

Order pronounced in the Open Court on this 15th Day of April, 2026 Sd/- Sd/- (SANJAY AWASTHI) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15/04/2026 R. Naheed *

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