“make available clause”

International TaxDTAA FTS ArticleDTAA FTS Article214 judgments

The decision most relied on for make available clause is Ishikawajima Harima Heavy Industries Ltd. v. DIT (288 ITR 408), cited in 394 judgments on BharatTax.

Leading authorities on make available clause

Ishikawajima Harima Heavy Industries Ltd. v. DIT

288 ITR 408 · 2007 · Supreme Court

394

citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

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. Ericsson A.B

343 ITR 470 · 2012 · High Court

256

citing judgments

Payments for the use of copyrighted software or reimbursement of data processing costs do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act or Article 12(3) of a DTAA where there is no transfer of copyright or rendering of services that "make available" technical knowledge. This position was later upheld by the Supreme Court.

DIT v. Guy Carpenter & Co Ltd.

346 ITR 504 · 2012 · High Court

171

citing judgments

For fees for technical services to be taxable under a tax treaty's 'make available' clause, a transfer of technology enabling the recipient to independently perform the service in the future is necessary, beyond mere service rendition. The case also clarifies that re-insurance services do not constitute 'imparting' of information taxable as royalty.

Raymond Ltd. v. Dy. CIT

86 ITD 791 · 2003 · ITAT

154

citing judgments

For services to qualify as 'Fees for Technical Services' or 'Fees for Included Services' under Double Taxation Avoidance Agreements (DTAAs), they must 'make available' technical knowledge, experience, skill, or processes to the recipient, enabling them to apply such expertise independently.

GVK Industries Ltd. v. Income Tax Officer

371 ITR 453 · 2015 · Supreme Court

119

citing judgments

Advice given by a financial consultancy firm on the modalities of procuring loans is considered a 'technical and consultancy service' for the purpose of taxation of fees for technical services.

EY Global Services Ltd. v. ACIT

441 ITR 54 · 2022 · High Court

citing judgments

Payments for software licenses that do not involve a transfer of copyright or proprietary interest, but merely authorize end-user access and use, do not constitute 'royalty' income. Additionally, IT support services are not taxable as Fees for Technical Services (FTS) or royalty.

Judgments citing make available clause

M/S. Essity Hygiene and Health Ab, Mumbai vs. Dy CIT, International Taxation-4(2)(1), Mumbai

In the result, appeal by assessee is partly allowed in the terms aforesaid

ITA 778/MUM/2021[2017-18]Status: DisposedITAT Mumbai10 Jun 2022AY 2017-18

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआअसं.778/मुं/2021 ("न.व. 2017-18) M/S. Essity Hygiene & Health Ab, C/O. Sudit K. Parekh & Co. Llp, Urmi Axis, 6Th Floor, Famous Studio Lane, Dr.E.Moses Road, Mahalaxmi, Mumbai 400 011. Pan: Aatcs-0899-K ...... अपीलाथ" /Appellant बनाम Vs. Deputy Commissioner Of Income Tax- (International Taxation)- 4(2)(1), 17Th Floor, Room No.1708, Air India Building, Nariman Point, Mumbai – 400 021 ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri Jitendra Jain ""तवाद" "वारा/Respondent By : Shri Milind S. Chavan सुनवाई क" "त"थ/ Date Of Hearing : 14/03/2022 घोषणा क" "त"थ/ Date Of Pronouncement : 10/06/2022 आदेश/ Order

For Appellant: Shri Jitendra JainFor Respondent: Shri Milind S. Chavan

Section 143(3)

next time Indian entity can perform similar services without recourse to the same- which is the core test for the fulfilment of 'make available' clause. We are unable to approve the stand of the authorities below on this point. In our considered view, in the light of the discussions above ... make available clause is not satisfied, in the course of rendition of services by the assessee, and, as such, the consultancy fees of Rs 1,97,94,209 cannot be brought to tax, in the hands of the assessee, under article 12 of Indo Swedish tax treaty.” 7 In assessment

M/S. Shell Information Technology International B.V., Mumbai vs. Dy CIT (International Taxation)-4(2)(1), Mumbai

In the result, appeal by the assessee is allowed for statistical purpose

ITA 1245/MUM/2021[2017-18]Status: DisposedITAT Mumbai11 May 2022AY 2017-18

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur AgarwalFor Respondent: Ms. Surabhi Sharma, CIT–DR

Section 143(3)Section 144C(13)Section 2(24)Section 234B

make available' of technical services that such receipts would not amount to fee for technical services so as to the "concept of make available clause' contained in Article l3(4)() of the treaty has not been satisfied In the given facts and circumstances of the case Hon„ble Delhi High ... fees for technical services'. Further, more, the Tribunal also held that such receipts would not amount to fees for technical services as the "make available" clause contained in article 13(4)(c) had not been satisfied in the facts and circumstances of the present case. 13. In our view

M/S Irunway India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(1), Bangalore

In the result, appeal of the assessee is partly allowed

ITA 229/BANG/2019[2015-16]Status: DisposedITAT Bangalore27 Apr 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sassessment Year : 2015-16 M/S. Irunway India Private Limited, Dcit, Vs. Regus Business Center, Office Circle – 3(1)(1), No.1015, Bengaluru. 10Th Floor, Tower-B, Unitech Cyber Park, Sector 39, Gurugram, Gurgaon, Haryana – 122 003. Pan : Aabci 5613 D Appellant Respondent

For Appellant: Shri. T. Suryanarayana, Senior AdvocateFor Respondent: Mrs. Susan D. George, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 195Section 37Section 40

these aspects would show that the service provider made available to the assessee knowledge, skill to the assessee and therefore the ‘make available’ clause of the Indo-US treaty was satisfied. 18. On the argument of the assessee that the source of income of the assessee was from customers ... India as it is deemed to have accrued and arisen to the non-resident in India. On the application of make available clause in Article 12(4)(b) of the Indo us treaty, the CIT(A) held that Mr.Neeraj Gupta had experience in patent litigation management and his services rendered

M/S. Indecomm Global Services (India) Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-3(1)(1), Bengaluru

In the result, the appeals filed by the assessee for assessment years 2013-2014 and 2014-2015 are partly allowed, as indicated above

ITA 2800/BANG/2017[2014-15]Status: DisposedITAT Bangalore12 Apr 2022AY 2014-15

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Smt.Priyadarshini Besaganni, Addl.CIT-DR

Section 40

paid to Seams Inc., Belgium as ‘legal and Professional expenses’ during the year. The AO opined that the shelter of non-applicability of make available clause on account of protocol between India and Belgium read with India-UK treaty cannot be taken on the payment made to Seams ... accrual on services received from Seams Inc. and DRT & Partners, the AO has held that the same is provisions in nature and thus make available clause is not applicable. The details of the amount disallowed is as given below: Party Amount (in Nature of service Name Rs.) Seams. Seams

M/S. Indecomm Global Services (India) Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-3(1)(1), Bengaluru

In the result, the appeals filed by the assessee for assessment years 2013-2014 and 2014-2015 are partly allowed, as indicated above

ITA 2799/BANG/2017[2013-14]Status: DisposedITAT Bangalore12 Apr 2022AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Smt.Priyadarshini Besaganni, Addl.CIT-DR

Section 40

DCIT (International Taxation), Circle-1(2)(1), New Delhi vs. Carrier Corporation, Usa

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

ITA 5083/DEL/2018[2013-14]Status: HeardITAT Delhi01 Feb 2022AY 2013-14

Bench: Sh. N. K. Billaiya & Ms. Astha Chandra(Through Video Conferencing) Assessment Year: 2013-14 Dcit (International Carrier Corporation Taxation), Circle – 1(2)(1) Vs 100, West Tenth Street, New Delhi Wilmington De 19801, Usa Pan No. Aaecc4806H (Appellant) (Respondent)

Section 115A

failed to appreciate that as per the TP study of Indian AE such services were of the nature of FIS and even make available clause was satisfied in the TP study.” 2. A perusal of the grievance of the revenue show that the deletion by the CIT(A) is subject

M/S Orkla Asia Pacific Pte Ltd, Bangalore vs. Deputy Commissioner of Income Tax (It) Circle-2(1), Bangalore

In the result, the appeal of the assessee stands allowed

ITA 193/BANG/2019[2015-16]Status: DisposedITAT Bangalore30 Dec 2021AY 2015-16

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiassessment Year : 2015-16 M/S. Orkla Asia Pacific Pte Ltd., The Deputy C/O Mtr Foods Pvt. Ltd., Commissioner Of No. 1, 2Nd & 3Rd Floor, Income Tax (It), 100 Feet Inner Ring Road, Asmnt, Circle – 2(1), Ejipura, Vs. Bangalore. Bangalore – 560 047. Pan: Aabco4087B Appellant Respondent Assessee By : Shri Sharath Rao, Advocate : Shri Pradeep Kumar, Cit Revenue By (Dr) Date Of Hearing : 03-11-2021 Date Of Pronouncement : 30-12-2021 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Final Assessment Order Dated 17/12/2018 Passed U/S. 143 (3) By The Ld.Dcit, Asmnt, Circle-2(1), Bangalore For Assessment Year 2015-16 On Following Grounds Of Appeal: “The Grounds Mentioned Hereinafter Are Without Prejudice To One Another. 1. Barred By Limitation The Order Passed By The Learned Assessing Officer ('Learned Ao') Is Barred By Limitation In View Of The Express Provisions Of Section 144C(13) Of The Income-Tax Act, 1961 ('The Act') Wherein, The Order Should Be Passed Within One Month From The End Of The Month In Which Dispute

For Appellant: Shri Sharath Rao, Advocate

Section 143Section 144C(13)Section 234ASection 234BSection 9(1)(vii)

Further the company has analysed that whether professional charges received by the company constitute FTS under Article 12 of DTAA by relying on make available clause. Page 6 of 26  Thereafter the company has submitted that there is no permanent Establishment (PE) in India by referring to article

M/S.Nds Limited, Bangalore vs. Asst. Commissioner of Income Tax, Bangalore

In the result, the appeal filed by assessee stands allowed

ITA 364/BANG/2017[2007-2008]Status: DisposedITAT Bangalore28 Dec 2021AY 2007-2008

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(It)A No. 364/Bang/2017 Assessment Year : 2007-08 M/S. Synamedia Ltd. [Formerly Known As ‘Nds Limited’], The Assistant C/O. M/S. Synamedia India Pvt. Commissioner Of Ltd., Income Tax, Block 9A & 9B, Pritech Park, International Survey No. 51-64/4, Taxation, Sarjapur Outer Ring Road, Vs. Circle – 1(2), Bellandur Village, Bangalore. Bangalore – 560 103. Pan: Aabcn2524L Appellant Respondent Assessee By : Shri Sharath Rao, Advocate : Shri Dilip, Standing Revenue By Counsel For Dept. Date Of Hearing : 16-12-2021 Date Of Pronouncement : 28-12-2021

For Appellant: Shri

Section 143(3)Section 147Section 234B

support services to be in the nature of FTS needs to satisfy certain criteria as per India UK DTAA. As there is a make available clause, it is a necessity that the technical knowledge and skill must remain with the person receiving the services even after a particular contract comes ... very similar to provision of the Act without understanding the legal position. d. The lower authorities have failed to appreciate that the “make available clause” required under the India-UK DTAA are not satisfied in the instant case e. The AO and the DRP have erred in not considering

M/S. Rajinder Kumar Aggarwal (HUF), New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2996/DEL/2016[2012-13]Status: DisposedITAT Delhi14 Oct 2021AY 2012-13

Bench: Shri Kul Bharat & Shri O.P. Kant[Through Video Conferencing] Assessment Year: 2012-13

Section 143(3)Section 195Section 40Section 9

automatically extends to India-France DTAA. In India UK DTAA fee for technical services (FTS) exclude the term ‘managerial services’ and provides for ‘make available clause’. While analyzing the Fee for technical services (FTS) definition as per India France DTAA , in view of the MFN clause, the entire definition ... hand, we find that for bringing the services under the net of Fee for Technical Services (FTS) under the India France DTAA, the ‘make available’ clause has to be satisfied. But in the services rendered by the non-resident of procuring export order for the assessee, no knowledge has been