NUNHEMS NETHERLANDS B.V.,NAPOLEONSWEG, NETHERLANDS vs. ASSISTANT COMMISSIONER OF INCOME TAX,, INTERNATIONAL TAXATION, GURGAON

ITA 3382/DEL/2023Status: DisposedITAT Delhi08 December 2025AY 2021-22Bench: SHRI VIKAS AWASTHY, JUDICIAL MEMBER, SHRI NAVEEN CHANDRA (Accountant Member)33 pages
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What did the Tribunal hold?

The Tribunal held that the testing services did not qualify as royalty as no intangible property was used or made available. Similarly, the IT support services were not taxable as FTS because the 'make available' clause of the DTAA was not satisfied.

What were the facts?

The assessee, Nunhems Netherlands B.V., received payments for testing services and IT support services from its Indian affiliate. The Assessing Officer treated these receipts as royalty and fees for technical services (FTS), respectively, which the assessee claimed as non-taxable.

What were the issues?

Whether payments for testing services constitute royalty and whether IT support services qualify as fees for technical services under the India-Netherlands DTAA, particularly concerning the 'make available' clause.

Which sections of the Income-tax Act were involved?

Section 9(1)(vi),Section 9(1)(vii),Section 143(3),Section 144C(13),Section 270A

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Income Tax Appellate Tribunal, DELHI ‘D’ BENCH,

Before: SHRI VIKAS AWASTHY, & SHRI NAVEEN CHANDRA

For Appellant: Shri Nageshwar Rao, Adv, Shri Pratik Rath, Adv
For Respondent: Ms. Anjula Jain, CIT-DR
Hearing: 12.09.2025Pronounced: 08.12.2025

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:

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This appeal by the assessee is directed against the order dated 28.09.2023 u/s 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 [the Act, for short] for A.Y 2021-22. 2. The assessee has raised the following grounds of appeal: Nunhems Netherlands [A.Y 2021-22] “1. That Ld. AO & majority Ld. DRP erred in treating remuneration of ₹3,58,03,282 received from providing testing services to Nunhems India ('AE') as royalty income under India-Netherlands DTAA. Order by majority of Ld. DRP is non-speaking and contrary to/ignoring Hon'ble Tribunal's decisions.

2.

That Ld. AO and majority Ld. DRP erred

The order continues below.

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