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“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

M/S Air France, New Delhi vs. DCIT, New Delhi

In the result, all the appeals filed by the assessee are partly

ITA 1150/DEL/2015[2011-12]Status: DisposedITAT Delhi24 Feb 2023AY 2011-12

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2007-08 With Assessment Year: 2008-09 With Assessment Year: 2009-10 With Assessment Year: 2011-12 With Assessment Year: 2012-13 With Assessment Year: 2013-14 With Assessment Year: 2014-15 With Assessment Year: 2015-16

that the services rendered are in the nature of technical services, hence, the income derived from such services has to be treated as Fees for Technical Services (FTS). Proceeding further, he observed that the assessee provides technical handling services to Austrian Airlines on daily basis for which the assessee ... claim of the assessee that profit from technical handling services is covered by Article 8 and in treating the Technical Income as “fee for technical services” at Rs. 1,81,79,476/- covered u/s 115A read with Section 44D and taxed the same at 20% of the gross receipts

Air France, New Delhi vs. Addl. DIT, New Delhi

In the result, all the appeals filed by the assessee are partly

ITA 5010/DEL/2011[2008-09]Status: DisposedITAT Delhi24 Feb 2023AY 2008-09

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2007-08 With Assessment Year: 2008-09 With Assessment Year: 2009-10 With Assessment Year: 2011-12 With Assessment Year: 2012-13 With Assessment Year: 2013-14 With Assessment Year: 2014-15 With Assessment Year: 2015-16

that the services rendered are in the nature of technical services, hence, the income derived from such services has to be treated as Fees for Technical Services (FTS). Proceeding further, he observed that the assessee provides technical handling services to Austrian Airlines on daily basis for which the assessee ... claim of the assessee that profit from technical handling services is covered by Article 8 and in treating the Technical Income as “fee for technical services” at Rs. 1,81,79,476/- covered u/s 115A read with Section 44D and taxed the same at 20% of the gross receipts

M/S Air France, New Delhi vs. Astt. Director of Income Tax, New Delhi

In the result, all the appeals filed by the assessee are partly

ITA 4812/DEL/2010[2007-08]Status: DisposedITAT Delhi24 Feb 2023AY 2007-08

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2007-08 With Assessment Year: 2008-09 With Assessment Year: 2009-10 With Assessment Year: 2011-12 With Assessment Year: 2012-13 With Assessment Year: 2013-14 With Assessment Year: 2014-15 With Assessment Year: 2015-16

that the services rendered are in the nature of technical services, hence, the income derived from such services has to be treated as Fees for Technical Services (FTS). Proceeding further, he observed that the assessee provides technical handling services to Austrian Airlines on daily basis for which the assessee ... claim of the assessee that profit from technical handling services is covered by Article 8 and in treating the Technical Income as “fee for technical services” at Rs. 1,81,79,476/- covered u/s 115A read with Section 44D and taxed the same at 20% of the gross receipts

DCIT, Corporate Circle-1(1), Bhubaneswar vs. M/S. Gridco Limited, Bhubaneswar

In the result, appeal of the revenue stands dismissed

ITA 298/CTK/2016[2010-11]Status: DisposedITAT Cuttack20 Feb 2023AY 2010-11

Bench: Before S/Shri George Mathan, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year :2010-2011 2011 Dcit, Corporate Circle Dcit, Corporate Circle-1(1), Vs. Grid Corporation Of Orissa Grid Corporation Of Orissa Bhubaneswar Bhubaneswar Ltd., Ltd., Gridco Gridco House, House, Janapath, Bhubaneswar Janapath, Bhubaneswar. Pan/Gir No. Pan/Gir No.Aabcg 5398 P (Appellant (Appellant) .. ( Respondent Respondent) Assessee By : S/Shri Ved Jain/P.Venugopal Rao /P.Venugopal Rao, Ars Revenue By : Shri M.K.Gautam, M.K.Gautam, Cit Dr Date Of Hearing : 20/0 02/2023 Date Of Pronouncement : 20/0 /02/2023 O R D E R Per Bench This Is An Appeal Filed By The Revenue Against The Order Of The Ld Against The Order Of The Ld Cit(A)-1, Bhubaneswar, 1, Bhubaneswar, Dated 9.5.2016 In Appeal No. In Appeal No.0493/14-15 For The Assessment Year Assessment Year 2010-2011. 2. S/Shri Ved Jain & P.Venugopal Rao, S/Shri Ved Jain & P.Venugopal Rao, Ld Ar Ld Ars Appeared For The Assessee & Shri M.K.Gautam, Ld Cit Dr Appeared For The Revenue. Assessee & Shri M.K.Gautam, Ld Cit Dr Appeared For The Revenue. Assessee & Shri M.K.Gautam, Ld Cit Dr Appeared For The Revenue.

For Appellant: S/Shri Ved Jain/P.Venugopal RaoFor Respondent: Shri M.K.Gautam
Section 194Section 194JSection 197(1)Section 40

personnel are not needed cannot be accepted. 10. Section 194J of the Act has only indicated that for the purpose of that section, fees for technical services would be as defined in section 9(1)(vii) of the Act. On considering that definition and what is involved in the proper ... Thus, I am wholly satisfied that the transmission, and wheeling charges paid by the applicant to RVPN are in the nature of fees for technical services and the applicant is obliged to withhold tax thereon under section 194J of the Act.” 5. It was the submission that the assessee purchases

Bharat Sanchar Nigam Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 1989/DEL/2017[2008-09]Status: DisposedITAT Delhi20 Feb 2023AY 2008-09

Bench: Shri N. K. Billaiya & Shri Anubhav Sharmabharat Sanchar Nigam Ltd, Vs. Acit, Taxation Section, First Floor, Circle-6(2), Bharat Sanchar Bhawan, New Delhi Janpath, New Delhi-11001 (Appellant) (Respondent) Pan:Aabcb5576G

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Sukesh Kumar Jain, CIT DR
Section 143(3)Section 147Section 194HSection 250Section 40Section 9(1)(vi)Section 9(1)(vii)

learned CIT(A) has erred in confirming the aforesaid disallowance by alternatively alleging the same to be in the nature of fees for technical services' under the provisions of Section 9(1)(vii) of the Act and the applicable DTAAS 9. That on the facts and circumstances of the case ... then Chief Justice of India Mr. S.H. Kapadia dated 03rd September 2013, has held that payment of IUC Charges is not “Fee for Technical Services" or "Royalty" within the meaning of its definition as per section 9(l)(vi) and 9(l)(vii) of the Act. While reaching the above

Span Air Pvt. Ltd, New Delhi vs. ITO TDS Ward 51, Ghaziabad

The Appeals are allowed for statistical purposes

ITA 4434/DEL/2019[2016-17]Status: DisposedITAT Delhi16 Feb 2023AY 2016-17

Bench: Shri N. K. Billaiya & Shri Anubhav Sharma

For Appellant: Sh. M. R. Sahu, CAFor Respondent: Sh. Sanjay Kumar, Sr. DR
Section 200ASection 206ASection 90(2)

issued raising a demand on account of short deduction of the taxes. The assessee had made certain payments in the nature of fees for technical services to non residents and other income of non-resident and filed e-TDS quarterly statement in Form 27Q for relevant Financial year

Kelly Services India Pvt. Ltd., New Delhi vs. Addl. CIT, Special Range- 5, New Delhi

The appeal is dismissed as withdrawn

ITA 556/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Feb 2023AY 2015-16

Bench: Sh. N. K. Billaiya & Sh. Anubhav Sharmaassessment Year: 2015-16 Kelly Services India Pvt. Addl. Cit Special Range-5 Ltd. 10Th Floor, Tower C, Vs New Delhi Unitech Cyber Park, Sector- 39, Gurgaon Pan No.Aabck6665K (Appellant) (Respondent)

Section 41(1)

Kelly Singapore') on account of Intercompany Divisional Charges without appreciating the fact that these services are not covered under the definition of fee for technical services ('FTS') as per Article 12(4) of the Double Taxation Avoidance Agreement between India - Singapore (Tndia- Singapore DTAA'). That on the facts and circumstances ... erred in upholding the disallowance of Intercompany divisional charges made by AO, being in the nature of Fees for Technical Services ('FTS') under Article 12(4) of the India- Singapore DTAA without appreciating the fact that services do not make available technical knowledge, skill etc. 4. That on the facts

DCIT, C-11(1), New Delhi vs. Hero Motocorp Ltd., New Delhi

Appeal of the Revenue is dismissed

ITA 1982/DEL/2019[2014-15]Status: DisposedITAT Delhi03 Feb 2023AY 2014-15

Bench: Shri Narendra Kumar Billaiya & Shri Kul Bharat

Section 14ASection 2(22)(e)Section 40Section 40a

aforesaid payments were made after deducting tax at source @10% being the rate of tax applicable in relation to payment of royalty and fees for technical services under Article 12 of Indo-Japan DTAA. AO: In the assessment order, the AO treated the aforesaid expenditure incurred by way of royalty

Tsys Card Tech Ltd, United Kingdom vs. DCIT Circle 3(1)(1) Int.Taxation, New Delhi

In the result, the appeal is allowed

ITA 2006/DEL/2022[2019-20]Status: DisposedITAT Delhi24 Jan 2023AY 2019-20

Bench: Dr. B. R. R. Kumarsh. Saktijit Dey

For Appellant: Sh. Kamal Sawhney, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 270A

erred in alleging that receipts in the nature of software license fee amounting to Rs 5,21,17,082 is taxable as Fees for Technical Services (FTS’) as per the Act and also as per the provisions of India-UK Double Taxation Avoidance Agreement ( DTAA ). 4.1 In doing

Hi-Lite Builders Private Limited, Kozhikode vs. DCIT, Central Circle-1, Kozhikode

In the result, the appeal by the assessee is allowed

ITA 620/COCH/2022[2009-2010]Status: DisposedITAT Cochin20 Jan 2023AY 2009-2010

Bench: Smt. Beena Pillai & Ms. Padmavathy S.Assessment Year : 2009-10

For Appellant: Mr. Shameem Ahamed, AdvocateFor Respondent: Smt. J M Jamuna Devi, Sr. AR
Section 139Section 143(3)Section 263Section 40

profession,- (a) in the case of any assessee— (i) *** (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 of labour ... proposed to extend the provisions of the section 40(a)(ia) to payments of interest, commission or brokerage, fee for professional services or fee for technical services to the residents and payments to a residential contractor or sub-contractor for carrying out any work (including supply of labour for carrying

The ACIT, Kochi vs. M/S.Cochin Shipyard Ltd, Kochi

In the result, all the appeals by the revenue are dismissed

ITA 659/COCH/2019[2013-14]Status: DisposedITAT Cochin20 Jan 2023AY 2013-14

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Smt. J M Jamuna Devi, Sr. ARFor Respondent: S/Shri Rajasekharan & K. Gopi, CAs
Section 143(3)Section 14ASection 32(1)(ii)Section 32(1)(iia)Section 40

company in the course of the process of foreign company buying a ship from the assessee. The AO treated the said payment as fees for technical services on the basis of website information of the payee company wherein it was stated that the payee company had a staff of about ... Technology, 327 ITR 456 by holding that the payment made by the assessee to broker are towards services in the nature of fees for technical services. 9. The CIT(A) on further appeal held that the impugned payments are not liable for tax deduction at source as the same

The ACIT, Kochi vs. M/S.Cochin Shipyard Ltd, Kochi

In the result, all the appeals by the revenue are dismissed

ITA 658/COCH/2019[2012-13]Status: DisposedITAT Cochin20 Jan 2023AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Smt. J M Jamuna Devi, Sr. ARFor Respondent: S/Shri Rajasekharan & K. Gopi, CAs
Section 143(3)Section 14ASection 32(1)(ii)Section 32(1)(iia)Section 40

company in the course of the process of foreign company buying a ship from the assessee. The AO treated the said payment as fees for technical services on the basis of website information of the payee company wherein it was stated that the payee company had a staff of about ... Technology, 327 ITR 456 by holding that the payment made by the assessee to broker are towards services in the nature of fees for technical services. 9. The CIT(A) on further appeal held that the impugned payments are not liable for tax deduction at source as the same

The ACIT, Kochi vs. M/S.Cochin Shipyard Ltd, Kochi

In the result, all the appeals by the revenue are dismissed

ITA 657/COCH/2019[2011-12]Status: DisposedITAT Cochin20 Jan 2023AY 2011-12

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Smt. J M Jamuna Devi, Sr. ARFor Respondent: S/Shri Rajasekharan & K. Gopi, CAs
Section 143(3)Section 14ASection 32(1)(ii)Section 32(1)(iia)Section 40

company in the course of the process of foreign company buying a ship from the assessee. The AO treated the said payment as fees for technical services on the basis of website information of the payee company wherein it was stated that the payee company had a staff of about ... Technology, 327 ITR 456 by holding that the payment made by the assessee to broker are towards services in the nature of fees for technical services. 9. The CIT(A) on further appeal held that the impugned payments are not liable for tax deduction at source as the same

The ACIT, Kochi vs. M/S.Cochin Shipyard Ltd, Kochi

In the result, all the appeals by the revenue are dismissed

ITA 656/COCH/2019[2010-11]Status: DisposedITAT Cochin20 Jan 2023AY 2010-11

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Smt. J M Jamuna Devi, Sr. ARFor Respondent: S/Shri Rajasekharan & K. Gopi, CAs
Section 143(3)Section 14ASection 32(1)(ii)Section 32(1)(iia)Section 40

company in the course of the process of foreign company buying a ship from the assessee. The AO treated the said payment as fees for technical services on the basis of website information of the payee company wherein it was stated that the payee company had a staff of about ... Technology, 327 ITR 456 by holding that the payment made by the assessee to broker are towards services in the nature of fees for technical services. 9. The CIT(A) on further appeal held that the impugned payments are not liable for tax deduction at source as the same

The ACIT, Kochi vs. M/S.Cochin Shipyard Ltd, Kochi

In the result, all the appeals by the revenue are dismissed

ITA 655/COCH/2019[2009-10]Status: DisposedITAT Cochin20 Jan 2023AY 2009-10

Bench: Smt. Beena Pillai & Ms. Padmavathy S.

For Appellant: Smt. J M Jamuna Devi, Sr. ARFor Respondent: S/Shri Rajasekharan & K. Gopi, CAs
Section 143(3)Section 14ASection 32(1)(ii)Section 32(1)(iia)Section 40

company in the course of the process of foreign company buying a ship from the assessee. The AO treated the said payment as fees for technical services on the basis of website information of the payee company wherein it was stated that the payee company had a staff of about ... Technology, 327 ITR 456 by holding that the payment made by the assessee to broker are towards services in the nature of fees for technical services. 9. The CIT(A) on further appeal held that the impugned payments are not liable for tax deduction at source as the same

Matrix Cellular International Services Ltd., New Delhi vs. JCIT, Special Range- 6, New Delhi

In the result, the appeal is partly allowed

ITA 6916/DEL/2019[2016-17]Status: DisposedITAT Delhi18 Jan 2023AY 2016-17

Bench: Sh. G. S. Pannu, Hon’Ble & Sh. Saktijit Dey

For Appellant: Sh. A. K. Khanna, CAFor Respondent: Sh. Sanjay Kumar, Sr. DR
Section 195Section 40

royalty under Article 12 of the DTAA. 5. Having held so, it is necessary to examine whether the payment made would qualify as Fees for Technical Services (FTS) under Article 13 of the India-Malaysia DTAA. On a reading of Article 13, it is evident, the source country

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Gurgaon vs. DCIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 4608/DEL/2019[2013-14]Status: DisposedITAT Delhi11 Jan 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Saktijit Dey

Section 144C(3)

Appellant from Inter- Continental Hotels Group (India) Pvt. Ltd. (‘IHG India’) towards provision of Management Support Charge to be in the nature of Fee for Technical Services (‘FTS’) under Article 12 of India-Singapore Double Taxation Avoidance Agreement (‘DTAA’/Treaty). 1.3 That on the facts and in the circumstances ... issue in dispute is whether the amount received towards provision of management support services to the Indian subsidiary is in the nature of Fee For Technical Service (FTS) under Article 12(4)(b) of India-Singapore Double Taxation Avoidance Agreement (DTAA). 4. Briefly the facts are, the assessee

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Singapore vs. ACIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 2986/DEL/2019[2014-15]Status: DisposedITAT Delhi11 Jan 2023AY 2014-15

Bench: Shri G.S. Pannu & Shri Saktijit Dey

Section 144C(3)

Appellant from Inter- Continental Hotels Group (India) Pvt. Ltd. (‘IHG India’) towards provision of Management Support Charge to be in the nature of Fee for Technical Services (‘FTS’) under Article 12 of India-Singapore Double Taxation Avoidance Agreement (‘DTAA’/Treaty). 1.3 That on the facts and in the circumstances ... issue in dispute is whether the amount received towards provision of management support services to the Indian subsidiary is in the nature of Fee For Technical Service (FTS) under Article 12(4)(b) of India-Singapore Double Taxation Avoidance Agreement (DTAA). 4. Briefly the facts are, the assessee

ACIT, International Taxation, Circle 3(1)(2), New Delhi vs. Sabre Decision Technologies International Llc, Usa

In the result, the appeal of the revenue is dismissed

ITA 7354/DEL/2017[2013-14]Status: DisposedITAT Delhi03 Jan 2023AY 2013-14

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 234ASection 44DSection 9Section 9(1)(vi)

nature of royalty under section 9(l)(vi) of the Act? 2. Whether the income of the assessee is of the nature of “fee for technical services” under the section 9(1)(vii) of the Income Tax Act 1961? This is required to be determined in view of the fact ... definition of royalty referred to in Section 9(l)(vi) of the Income Tax Act. These will also fall under the head ‘Fee for technical services’ which is discussed here under. 4.4.12 The assessee has further given detailed arguments that the consideration for sale of software or computer program does

Sabre Decision Technologies International Llc, New Delhi vs. ACIT, International Taxation, Circle 3(1)(2), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 5782/DEL/2017[2014-15]Status: DisposedITAT Delhi03 Jan 2023AY 2014-15

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 234ASection 44DSection 9Section 9(1)(vi)

nature of royalty under section 9(l)(vi) of the Act? 2. Whether the income of the assessee is of the nature of “fee for technical services” under the section 9(1)(vii) of the Income Tax Act 1961? This is required to be determined in view of the fact ... definition of royalty referred to in Section 9(l)(vi) of the Income Tax Act. These will also fall under the head ‘Fee for technical services’ which is discussed here under. 4.4.12 The assessee has further given detailed arguments that the consideration for sale of software or computer program does