Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES ‘D’: NEW DELHI.
(Assessment Year: 2022-23) Inteva Products Netherlands B.V. vs. ACIT, IT Circle 2(1)(1), Siriusdreef 17, 2132, WT, Hoofddorp, Delhi. Netherlands. (PAN :AADCI5208G) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Kshitij Bansal, CA REVENUE BY : Shri Saroj Kumar Dubey, CIT DR Date of Hearing : 28.08.2025 Date of Order : 19.11.2025 ORDER
PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :
This appeal preferred by the assessee is directed against the assessment order dated 27.01.2025 passed by the ACIT, Circle Int. Tax 2(1)(1), Delhi under section 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 (for short ‘the Act”) for Assessment Year 2022-23pursuant to the directions of the Dispute Resolution Panel u/s 144C(5) of the Act raising following grounds of appeal :- “Ground 1. On the facts and circumstances of the case and in law, the Assistant Commissioner of Income-tax, Circle International Tax - 2(1)(1), Delhi ('Ld.
AO) pursuant to the directions of the Dispute Resolution Panel - 1, New Delhi ('Ld. DRP) erred in making an addition of INR 8,28,34,750 and not following the orders of the Co-ordinate Bench of Hon'ble Tribunal in the Appellant's own case for AY 2014-15 to AY 2020-21 without appreciating that the there was no change in factual matrix of the case. The Appellant prays that the orders of Co-ordinate Bench of Hon'ble Tribunal ought to be followed and addition made by the Ld. AO should be deleted. Ground 2 On the facts and circumstances of the case and in law, the Ld. AO pursuant to the directions of the Ld. DRP erred in treating the receipts for business support services of INR 8,28,34,750 as fees for technical services ('FTS) as per Article 12 of the India-Netherlands Double Taxation Avoidance Agreement (DTAA) without appreciating that the services are managerial in nature and hence do not fall within the definition of FTS. The Appellant prays that the addition made by the Ld. AO should be deleted. Ground 3 On the facts and circumstances of the case and in law, the Ld. AO pursuant to the directions of the ld. DRP erred in treating the receipts for business support services of INR 8,28,34,750 as FTS as per Article 12 of the India-Netherlands DTAA without appreciating that the services rendered by the Appellant do not make available technical knowledge to the recipient and hence cannot be taxed in India. The Appellant prays that the addition made by the Ld. AO should be deleted. Ground 4 Without prejudice to any other grounds, on the facts and circumstances of the case and in law, the Ld. AO has erred in taxing receipts of INR 8,28,34,750 as FTS as per the provisions of section 115A of the Income- tax Act, 1961 (the Act') and levying surcharge and education cess instead of beneficial provisions of the India-Netherlands DTAA. The Appellant prays that the beneficial provisions of the India-Netherlands DTAA be applied. Ground 5 Without prejudice to any other grounds, the Ld. AO has erred in levying tax at 40% on income chargeable to tax as FTS under the provisions of the Act.
The Appellant prays that the beneficial provisions of the India-Netherlands DTAA be applied. Ground 6 On the facts and in the circumstances of the case and in law, the Ld. AO has erred in levying interest under section 234B of the Act corresponding to the addition of INR 8,28,34,750 as FTS. The Appellant prays that the consequential interest levied under section 234B of the Act is unwarranted and ought to be deleted. Ground 7 On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 270A of the Act on account of additions made in assessment order. The Appellant prays that the penalty proceedings be dropped.”
At the outset, ld. AR of the assessee submitted that the present appeal emanates from the final assessment order dated 27.01.2025 on the sole issue of taxability of business support services received by the assessee of Rs.8,28,34750/- as alleged fee for technical services (FTS) under Article 12 of India-Netherlands Tax Treaty as follows :- Particulars Amount (in Rs.) Returned Income 508,74,214 Add : additions on account of business 8,28,34,750 support services taxed as FTS/FIS Assessed Income 13,37,08,964
He submitted that this issue involved in the Ground Nos.1 to 4 stands squarely covered in assessee’s own case by the ITAT from AY 2014-15 till AY 2021-22. He further submitted that the instant year involves no change of factual matrix vis-à-vis earlier years and the aforesaid issue of taxability of business support services is a legacy issue as stated at pages 24 & 25 of the assessment order. He submitted that the said issue in the case of the assessee is fully covered by the decisions of ITAT in AYs to 2014-15 to 2020-21 and accordingly, pleaded that the grounds may be allowed by following the same and delete the addition.
On the other hand, ld. DR of the Revenue did not controvert the aforesaid facts.
Considered the rival submissions and material placed on record. We find that the issue involved is squarely covered by the decisions of coordinate Benches time to time i.e. from AYs 2014-15 to 2021-22. For the sake of brevity, we reproduce the relevant extract of the order of AY 2014-15 in order dated 31.01.2023 as under :- “12. From the nature of services rendered, it is very much evident that they are mostly in the nature of managerial services. Reading of Article-12 (5) of India-Netherlands DTAA reveals that it does not include managerial services within FTS. Therefore, the payment received by the assessee cannot be treated as FTS under India- Netherlands DTAA. Even, assuming for the sake of argument that payment received for certain kind of services is in the nature of FTS, however, the make available condition needs tobesatisfied. Neither the Assessing Officer nor learned DRP have established on record that by rendering the services, the assessee has made available technical knowledge, know-how, skill etc. to the recipient of services, which would have enabled the recipient of such services to utilize it independently without the aid and assistance of the assessee. Thus, in our view, the make available condition is not satisfied. Therefore, the payment received cannot be treated as FTS under Article-12(5) of India Netherlands DTAA. Hence, we are inclined to delete the addition made by the Assessing Officer.”
Respectfully following the aforesaid decision of the coordinate Bench, we are inclined to allow ground nos.1 to 4.
Ground Nos. 5 & 6 on account of levy of tax and interest are consequential in nature.
Ground No.7 is with regard to initiation of penalty proceedings which is premature.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 19th day of November, 2025.