“fees for technical services”

International TaxSection 9(1)(vii)Section 9(1)(vii)1,408 judgments

The decision most relied on for fees for technical services is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on fees for technical services

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT

432 ITR 471 · 2021 · Supreme Court

914

citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. De Beers India Minerals (P.) Ltd.

346 ITR 467 · 2012 · High Court

371

citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

DIT v. Nokia Networks OY

358 ITR 259 · 2013 · High Court

276

citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

CIT v. Siemens Aktiongesellschaft

310 ITR 320 · 2009 · High Court

259

citing judgments

Reimbursements of actual expenses without any profit element are not taxable income. Additionally, mere amendments to the Income-tax Act do not override the provisions of Double Taxation Avoidance Agreements (DTAAs).

Skycell Communications Ltd. v. DCIT

251 ITR 53 · 2001 · High Court

253

citing judgments

Technical services involve human intervention and expertise, not just routine or machine-based operations. Routine customer support and standard facility provision through technology do not constitute technical services under the Act.

Transmission Corporation of Andhra Pradesh v. CIT

239 ITR 587 · 1999 · Supreme Court

243

citing judgments

The Supreme Court lays down principles for deducting tax at source (TDS) under Section 195 on payments to non-residents, including aspects of income deemed taxable in India and the application of Double Taxation Avoidance Agreements (DTAAs) under Section 90.

ONGC v. CIT

376 ITR 306 · 2015 · Supreme Court

241

citing judgments

Income derived by a non-resident for services related to mineral oil operations, falling under the presumptive taxation regime of Section 44BB, cannot simultaneously be treated as fees for technical services under Section 9(1)(vii). The specific presumptive provisions override the general FTS definition, particularly when DTAA applies.

Judgments citing fees for technical services

DCIT, Intl. Taxn., Circle 1(2), Bangalore vs. Ibm Canada Limited, Bangalore

In the result, the appeal filed by the revenue is hereby dismissed

ITA 1330/BANG/2024[2014-15]Status: DisposedITAT Bangalore23 Aug 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Yogesh Kumar Us

For Appellant: Shri Sharath Rao, CA, Dhiraj R, AdvocateFor Respondent: Shri Subramanian S, JCIT

Section 143(3)Section 147Section 148Section 201Section 9(1)(vii)

made a payment of ₹ 2,97,69,953.00 to the assessee in the year under consideration which was in the nature of fees for technical services in the manner provided under section 9(1)(vii) of the Act and also as per the provisions of the DTAA between India

DCIT, Intl. Taxn., Circle 1(2), Bangalore vs. Ibm Singapore Pte. Limited, Bangalore

In the result, the appeal filed by the revenue is hereby dismissed

ITA 1329/BANG/2024[2017-18]Status: DisposedITAT Bangalore23 Aug 2024AY 2017-18

Bench: Shri Waseem Ahmed & Shri Yogesh Kumar Us

For Appellant: Shri Sharath Rao, CA, Dhiraj R, AdvocateFor Respondent: Shri Subramanian S, JCIT

Section 143(3)Section 147Section 148Section 201Section 9(1)(vii)

DCIT, Intl Taxn, Circle-1(2), Bangalore vs. Ibm Italia Spa, India

In the result, the appeal filed by the revenue is hereby dismissed

ITA 1325/BANG/2024[2014-15]Status: DisposedITAT Bangalore23 Aug 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Yogesh Kumar Us

For Appellant: Shri Sharath Rao, CA, Dhiraj R, AdvocateFor Respondent: Shri Subramanian S, JCIT

Section 143(3)Section 147Section 148Section 201Section 9(1)(vii)

DCIT, Intl. Taxn., Circle 1(2), Bangalore vs. Ibm Deutschland Gmbh, India

In the result, the appeal filed by the revenue is hereby dismissed

ITA 1312/BANG/2024[2014-15]Status: DisposedITAT Bangalore23 Aug 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Yogesh Kumar Us

For Appellant: Shri Sharath Rao, CA, Dhiraj R, AdvocateFor Respondent: Shri Subramanian S, JCIT

Section 143(3)Section 147Section 148Section 201Section 9(1)(vii)

Cma Cgm Agencies India Private Limited, Elphinstone Road-West, Mumbai vs. Deputy Commissioner of Income Tax, Circle 1(1), Pune

In the result, the appeal filed by the assessee stands partly allowed

ITA 1454/PUN/2023[2013-14]Status: DisposedITAT Pune22 Aug 2024AY 2013-14

Bench: Shri G. D. Padmahshali & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1454/Pun/2023 िनधा"रण वष" / Assessment Year : 2013-14 Cma Cgm Agencies India Vs. Dcit, Circle-1(1), Pune. Private Limited, One International Centre, Tower-3, 8Th Floor, Senapati Bapat Marg, Elphistone Road- West, Mumbai- 400013. Pan : Aadcc3951G Appellant Respondent Assessee By : Mahenov Thakkar Revenue By : Shri Nitin Patil Date Of Hearing : 24.07.2024 Date Of Pronouncement : 22.08.2024 आदेश / Order Per Vinay Bhamore, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Dated 03.11.2023 Passed By Ld Cit(A)/Nfac For The Assessment Year 2013-14. 2. The Appellant Raised The Following Grounds Of Appeal :- “Disallowance Under Section 40(A)(Ia) Of The Act Amounting To Rs.4,86,77,518/- 1. Erred In Upholding The Action Of The Learned Assessing Officer (‘Ao’) & Holding That Payment Of It Services To Be In The Nature Of Royalty Under Section 9(1)(Vi) Of The Act/ Fees For Technical Services Under Section 9(1)(Vii) Of The Act;

For Appellant: Mahenov ThakkarFor Respondent: Shri Nitin Patil

Section 143(2)Section 143(3)Section 194JSection 195Section 271(1)(c)Section 40Section 9(1)(vi)Section 9(1)(vii)

holding that payment of IT services to be in the nature of royalty under section 9(1)(vi) of the Act/ fees for technical services under section 9(1)(vii) of the Act; 2 2. erred in not following the ruling of the Hon'ble Income-tax Appellate Tribunal ... assessee itself has held that the payment which is in the nature of software maintenance charges does not fall in the category of fees for technical services i.e. FTS and, therefore, no TDS was required to be made by the assessee. Regarding the second addition of Rs.41

ITO Ward-1(1) Nagpur, Nagpur vs. Ashwami Sales and Marketing Pvt.Ltd, Nagpur

In the result, appeal filed by the Revenue is dismissed

ITA 294/NAG/2023[2013-14]Status: DisposedITAT Nagpur21 Aug 2024AY 2013-14

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Hitesh P. ShahFor Respondent: Shri Kailash C. Kanojiya

Section 143(1)Section 194(7)Section 194CSection 194C(6)Section 194C(7)Section 40Section 40A(2)(b)

194C(3) of the Act reads thus: "Section 40(a)(ia) : Any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply

Coursera Inc., United States of America vs. Assistant Commissioner of Income Tax, Circle 1(2)(1), International Taxation, Delhi

In the result, the appeals are allowed

ITA 3646/DEL/2023[2021-22]Status: DisposedITAT Delhi21 Aug 2024AY 2021-22

Bench: Shri Saktijit Dey, Vice- & Dr. B.R.R. Kumar

Section 143(3)Section 144CSection 9(1)(vii)

dispute in the present appeals relates to taxability of certain amounts received by the assessee from Indian customers as Fee for Technical Services (FTS)/Fee for Included Services (FIS) in terms with section 9(1)(vii) of the Act and Article 12(4) of India – USA Double Taxation Avoidance Agreement ... copyright. 17. Having held so, the next issue which arises for consideration is, whether the subscription fee can be treated as fees for technical services. As discussed earlier, it is evident that the assessee has collated data from various journals and articles and put them in a structured manner

Coursera Inc., United States of America vs. Assistant Commissioner of Income Tax, Circle 1(2)(1), International Taxation

In the result, the appeals are allowed

ITA 2416/DEL/2023[2020-21]Status: DisposedITAT Delhi21 Aug 2024AY 2020-21

Bench: Shri Saktijit Dey, Vice- & Dr. B.R.R. Kumar

Section 143(3)Section 144CSection 9(1)(vii)

John Wiley and Sons, Inc., U. S vs. DCIT Circle 2(1)(2), International Taxation, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2344/DEL/2023[2020-21]Status: DisposedITAT Delhi21 Aug 2024AY 2020-21

Bench: Dr. B. R. R. Kumar, Sh. Sudhir Pareek

For Appellant: Sh. Vishal Kalra, Adv. &For Respondent: Sh. Vijay B. Vasanta, CIT-DR

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

holding that consideration amounting to INR 16,12,78,571 received by the Appellant for sale of online journals or books constitutes Fees for Technical Services (“FTS”) /' Fees for Included Services (“FIS”) under section 9(1)(vii) of the Act read with Article 12 of India-USA tax treaty ... treat the receipts of Rs.16.12 Cr. from Indian customers as Royalty and Fees for Included Services 4 John Wiley and Sons Inc. (“FIS”) / Fee for Technical Services (“FTS”) as per the provisions of the Act read with Article 12 of India-US tax treaty and proposed an addition of Rs.16

Atos Information Technology Hk Limited, Mumbai vs. DCIT (International Taxation), 1(1)(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 2743/MUM/2024[2006-07]Status: DisposedITAT Mumbai14 Aug 2024AY 2006-07

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Rahul Chaudhary, Hon’Ble

For Appellant: Ms. Chandi Shah, Ms. Tejal Saraf, Shri YogeshFor Respondent: Shri Anil Sant, Addl. CIT, D/R

Section 154Section 244ASection 244A(2)

date was 30/09/2006. The returned income was Nil but the payment received from Standard Charterd Bank were considered as payments for royalty and fees for technical services. These additions were deleted by the Tribunal vide its order dt. 09/02/2017 and while giving effect to this order of the Tribunal, interest

Maersk Logistics & Services International B.V (Erstwhile Damco International B.V), Mumbai vs. DCIT, International Taxation Circle 3(2)(1), Mumbai

ITA 4345/MUM/2023[2021-22]Status: DisposedITAT Mumbai14 Aug 2024AY 2021-22

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Rahul Chaudhary, Hon'Bleι.Τ.Α. No. 4345/Mum/2023

For Appellant: Shri Manish Kanth, A/RFor Respondent: Shri Anil Sant, Addl. CIT, D/R

Section 143(3)Section 9(1)(vii)

common grievance in both the appeals relate to the treatment of network fees earned during the year by the assessee as fees for technical services and royalty under the Income-tax Act and under Article 13 of the India Netherland DTAA. Though, the quantum may differ. 4. Briefly stated ... also applicable in view of the treaty. Accordingly, the network fees of Rs.41,06,79,169/- was taxed as fees for technical services and royalty. 7. Objections were raised before the DRP and the DRP after considering the facts and the submissions, was of the opinion that

Maersk Logistics & Services International A/S ( Erstwhile, Damco International A/S), Mumbai vs. DCIT, International Taxation Circle 3(2)(1), Mumbai

ITA 4325/MUM/2023[2021-22]Status: DisposedITAT Mumbai14 Aug 2024AY 2021-22

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Rahul Chaudhary, Hon'Bleι.Τ.Α. No. 4345/Mum/2023

For Appellant: Shri Manish Kanth, A/RFor Respondent: Shri Anil Sant, Addl. CIT, D/R

Section 143(3)Section 9(1)(vii)

ACIT, New Delhi vs. Shri Bhawan Mohan Garg, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 2624/DEL/2017[2011-12]Status: DisposedITAT Delhi13 Aug 2024AY 2011-12

Bench: Sh. S. Rifaur Rahman & Sh. Sudhir Kumarassessment Year: 2011-12 Acit Vs Bhawan Mohan Garg Circle – 32 (1) C-16, Green Park New Delhi Extension, New Delhi Pan No.Aahpg2084K (Appellant) (Respondent)

Section 143(2)Section 143(3)Section 145Section 195Section 40Section 40t

India. Therefore, the provisions of section 9(1)(i) of the Act are not applicable in this case. As far as fees for technical services is concern, the appellant has contended that its case does not fall in the definition of fees for technical services as contained in Article ... services in India. The appellant has relied upon various judgments on the issue in his favour. According to the definition contained in DTAA, fees for technical service means payment of any kind made to any person in consideration of services of technical nature if such services make available technical knowledge

Kpmg Assurance and Consulting Services LLP, Mumbai vs. Assistant Commissioner of Income Tax-Circle-16(2), Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2415/MUM/2023[2014-15]Status: DisposedITAT Mumbai12 Aug 2024AY 2014-15

Bench: SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

Organisation for Economic Cooperation and Development (OECD). This clause provides for lower of rate of taxation at source on dividends, interest, royalties or fees for technical services as the case may be, or restriction of scope of royalty/fee for technical services in the tax treaty, similar to concession given ... made by the assessee to its associate concerns based in countries apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical Services" as defined under Article 12/13 of the respective DTAAs. 3. On the fact and in the circumstances of the case

Kpmg Assurance and Consulting Services LLP, Mumbai vs. Assistant Commissioner of Income Tax-Circle-16(2), Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2414/MUM/2023[2015-16]Status: DisposedITAT Mumbai12 Aug 2024AY 2015-16

made by the assessee to its associate concerns based in countries apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical Services" as defined under Article 12/13 of the respective DTAAs. 3. On the fact and in the circumstances of the case ... alive to the fact that there is no specific taxability provision, under India Thailand tax treaty with respect to taxability of fees for technical services. Profits earned by rendering fees for technical services are only a species of business profits just as the profits any other economic activity. However, without

Kpmg Assurance and Consulting Services LLP, Mumbai vs. Assistant Commissioner of Income Tax-Circle-16(2), Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2413/MUM/2023[2016-17]Status: DisposedITAT Mumbai12 Aug 2024AY 2016-17

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

Kpmg Assurance and Consulting Services LLP, Mumbai vs. Assistant Commissioner of Income Tax -16(2), Mumbai

ITA 2411/MUM/2023[2012-13]Status: DisposedITAT Mumbai12 Aug 2024AY 2012-13

made by the assessee to its associate concerns based in countries apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical Services" as defined under Article 12/13 of the respective DTAAs. 3. On the fact and in the circumstances of the case ... that while computing the income chargeable under the head ‘Profits and Gains of Business or Profession’, deduction shall not be allowed for royalty, fees for technical services or other sum chargeable under the Act paid/payable outside India in case of a default committed by the Assessee in withholding tax from

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2277/MUM/2023[2017-18]Status: DisposedITAT Mumbai12 Aug 2024AY 2017-18

made by the assessee to its associate concerns based in countries apart from Israel, Philippines constitute payments for Independent Personal service instead of Fees for Technical Services" as defined under Article 12/13 of the respective DTAAs. 3. On the fact and in the circumstances of the case ... that while computing the income chargeable under the head ‘Profits and Gains of Business or Profession’, deduction shall not be allowed for royalty, fees for technical services or other sum chargeable under the Act paid/payable outside India in case of a default committed by the Assessee in withholding tax from

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2276/MUM/2023[2016]Status: DisposedITAT Mumbai12 Aug 2024

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2274/MUM/2023[2014-15]Status: DisposedITAT Mumbai12 Aug 2024AY 2014-15

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)