GE ENGINE SERVICES LLC,UNITED STATES OF AMERICA vs. ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI

ITA 3700/DEL/2023Status: DisposedITAT Delhi11 March 202677 pages
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What did the Tribunal hold?

The Tribunal held that the AO erred in taxing the receipts as Fees for Included Services (FIS) under the DTAA. The preparation of a 'workscope' by the assessee for repair activities was considered a part of the normal repair process and did not constitute making available technical knowledge or transferring technical plans to the customers.

What were the facts?

The assessee, GE Engine Services LLC, USA, provided offshore aircraft engine repair and overhaul services, including spare parts supply, to Indian customers. The Assessing Officer (AO) taxed these receipts as Fees for Technical Services (FTS) under Section 9(1)(vii) of the Income Tax Act and Article 12(4)(b) of the India-USA DTAA.

What were the issues?

Whether offshore aircraft engine repair and overhaul services, including the preparation of a workscope, constitute 'Fees for Included Services' under the India-USA DTAA, specifically if they 'make available' technical knowledge to the customer.

Which sections of the Income-tax Act were involved?

Section 9(1)(vii)

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Income Tax Appellate Tribunal, DELHI BENCH, D: NEW DELHI

Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH

For Appellant: Adv. | Ms. Shruti Khimta, AR

PER BRAJESH KUMAR SINGH, AM, This appeal filed by the assessee is directed against the Final Assessment Order (FAO) passed u/s 143(3) r.w.s.144C(13) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') dated 20.10.2023 pursuant to the directions of the Hon'ble Dispute Resolution Panel (DRP) vide order dated 13.09.2023 u/s 144C(5) of the Act for Assessment Years (AY.) 2021-22. 2. Ground no. 1 of the appeal and the submissions of the assessee are reproduced as under : On the facts and circumstances of the case & in law, the assessmen

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