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Facts
The assessee, ESAB UK, a UK resident, provided management services to its Indian group company, EWAC Alloys, earning Rs. 10,98,79,025/-. The assessee claimed this income as non-taxable in India, arguing it constituted business income not taxable due to the absence of a Permanent Establishment (PE) and that the services did not make technical knowledge available as per the India-UK DTAA.
Held
The Tribunal held that the services rendered were primarily managerial in nature and did not fall under the definition of 'Fees for Technical Services' (FTS) under Article 13 of the India-UK DTAA because they did not make available technical knowledge or consist of the development and transfer of technical plans or designs. Therefore, the income was not taxable in India.
Key Issues
Whether the income from management services provided by ESAB UK to EWAC Alloys is taxable in India as Fees for Technical Services (FTS) under the Income Tax Act and the India-UK Double Taxation Avoidance Agreement (DTAA), considering the 'make available' clause.
Sections Cited
Section 9(1)(vii) of the Income Tax Act, Article 13 of India-UK DTAA, Section 250 of the Income Tax Act, Section 270A of the Income Tax Act
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Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI
Before: SMT BEENA PILLAI & SHRI RATNESH NANDAN SAHAY
O R D E R
Per : Ratnesh Nandan Sahay, Accountant Member:
This appeal has been filed by the revenue against the Order of the Ld. CIT (Appeals) passed u/s. 250 of the Income Tax Act [the ‘Act’ in short]