| The Tax Publishers2019 TaxPub(DT) 7779 (Mum-Trib) INCOME TAX ACT, 1961
Section 90
With regard to various streams of services provided by non-resident assessee to VOIPL, there was no imparting of any kind of knowledge, skill or experience by way of information concerning industrial, commercial or scientific which was made available to VOIPL. Thus, none of the services provided by assessee in terms of service 'agreement' fell within the scope and ambit of 'royalty' as defined in article 12(4) of DTAA between India and Netherlands. Further, payment received by assessee were on account of reimbursement and did not have element of profit, accordingly, there could be no taxability in India.
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Double taxation relief - Agreement between India and Netherland - Roaylty as per article 12(4) - Management services charges received by non-resident--Non-imparting of technical knowledge or skill, etc, by way of information provided to Indian entity
Assessee based at netherlands in terms of management support agreement with VOIPL provided business support services to said entity in the field of information technology, operation, quality, health and safety, estimating engineering marketing, etc., AO held the payment to be in the nature of royalty and therefore, taxable in India.Held: With regard to various streams of services provided by assessee to VOIPL, there was no imparting of any kind of knowledge, skill or experience by way of information concerning industrial, commercial or scientific which was made available to VOIPL. Thus, none of the services provided by assessee in terms of service 'agreement' fell within the scope and ambit of 'royalty' as defined in article 12(4) of DTAA between India and Netherlands. Further, payment received by assessee were on account of reimbursement and did not have element of profit, accordingly, there could be no taxability in India.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
IN THE ITAT, L BENCH, MUMBAI
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