DEPUTY DIRECTOR OF INCOME-TAX vs. M/S. SANDVIK AB.,, PUNE

The Revenue has raised following grounds in the appeal : “1. Whether on the facts and in the circumstances of the case, the DRP, Mumbai erred in concluding that the services provided by the assessee do not qualify as Fees for Technical Service under clause (b)of para 4 of Article 12 of Double Taxation Avoidance Agreement between India and Portuguese Republic by referring to the Protocol of India-Sweden DTAA. 2. Whether on the facts and in the circumstances of the case, the DRP, Mumbai erred in concluding that the term "make available" means supplying or transferring of technical knowledge or technology to another. 3. Whether on the facts and in the circumstances of the case, the DRP, Mumbai erred in allowing assessee's appeal without giving a categorical finding as to how the services are not taxable in India as per India-Portuguese DTAA. 4. The appellant craves to leave to add to modify any of the grounds of appeal.”

Shri Nikhil Pathak appearing on behalf of the assessee submitted that the assessee filed its return of income for the impugned assessment year on 30-11-2011 declaring total income as Nil. The assessee is a Non Resident company incorporated in Sweden. During the period relevant to the assessment year under appeal the assessee entered into transactions with its subsidiaries in India and received payments for the services provided as under : Sr. Name of the AE Nature of transaction Amount in Rs. No. 1 Sandvik Asia Ltd. Management service fees 21,24,70,400 2 Walter Tools India Pvt. Ltd. Technical services 1,04,98,188 TOTAL 22,29,68,588

The ld. AR pointed that the Assessing Officer held the services rendered by the appellant to its Indian subsidiaries as „fee for technical services‟ after drawing inference from Sweden Tax Treaty. The ld. AR contended that similar additions were made in assessment years 2008-09 and 2010-11. The assessee carried the matter in appeal in ITA No. 47/PN/2013 for assessment year 2008-09 decided on 22-05-2015 before the Tribunal. The Tribunal deleted the additions by placing reliance on the decision of Tribunal order in assessee‟s own case in ITA No. 1720/PN/2011 for assessment year 2007-08 decided on 28-11-2014. Similarly, in assessment year 2010-11 the addition was made by the authorities below for identical reasons. The Tribunal in assessee‟s appeal for assessment year 2010-11 in ITA No. 384/PUN/2015 decided on 20-12- 2017 deleted the additions. In the assessment year under appeal the relief has been granted by the Dispute Resolution Panel (DRP) on the basis of decision of Tribunal in assessee‟s case for assessment years 2007-08 and 2008-09. The ld. AR furnished copy of order of the Tribunal in ITA No. 47/PN/2013 (supra) and ITA No. 384/PUN/2015 (supra).

Smt. Nirupama Kotru representing the Department vehemently defended the additions made by Assessing Officer in draft assessment order dated 23-03-2015. However, the ld. DR fairly admitted that the issue raised by the Revenue in appeal is identical to the one already adjudicated by the Tribunal in assessee‟s own case in earlier assessment years.

Both sides heard. Orders of the authorities below perused. The solitary issue raised by the Revenue in appeal is against the findings of Assessing Officer/DRP in holding that the services provided by the

Thus, for the aforesaid reasons we find that no merit in the appeal by the Department. Accordingly, the impugned order is upheld and the appeal of the Revenue is dismissed.

In the result, the appeal of Revenue is dismissed.