Outotec Oyj, Kolkata v. DDIT(IT)-2(1), KOLKATA, Kolkata

ITA 558/KOL/2014 | 2010-2011
Pronouncement Date: 14-10-2016

Appeal Details

RSA Number 55823514 RSA 2014
Assessee PAN AABCO2957Q
Bench Kolkata
Appeal Number ITA 558/KOL/2014
Duration Of Justice 2 year(s) 6 month(s) 16 day(s)
Appellant Outotec Oyj, Kolkata
Respondent DDIT(IT)-2(1), KOLKATA, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 14-10-2016
Appeal Filed By Assessee
Bench Allotted C
Tribunal Order Date 14-10-2016
Date Of Final Hearing 22-09-2016
Next Hearing Date 22-09-2016
Assessment Year 2010-2011
Appeal Filed On 28-03-2014
Judgment Text
1 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI N. V. VASUDEVAN JM & SHRI M. BALAGAN ESH AM] I.T.A NOS. 558/KOL/2014 ASSESSMENT YEAR: 2010-11 & I.T.A NOS. 462/KOL/2015 ASSESSMENT YEAR: 2011-12 OUTOTEC OYJ (PAN: AABCO2957Q) VS. DEPUTY DIRECTOR OF INCOME-TAX (I.T)-2(1) KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 22.09.2016 DATE OF PRONOUNCEMENT: 14.10.2016 FOR THE APPELLANT: SHRI K.M. GUPTA ADVOCATE & SHRI S. ROY CHOUDHURY FCA FOR THE RESPONDENT: SHRI G. MALLIKARJUNA CIT DR ORDER PER SHRI M. BALAGANESH AM: BOTH THESE APPEALS BY ASSESSEE ARE ARISING OUT OF S EPARATE ORDERS OF DISPUTE RESOLUTION PANEL KOLKATA DATED 23.12.2013 AND 30.1 2.2014 U/S. 144C(5) R.W.S. 144C(8) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO A S THE ACT. SINCE ISSUES ARE IDENTICAL AND FACTS ARE COMMON WE DISPOSE OF BOTH THESE APPEALS BY THIS CONSOLIDATED ORDER. 2. THE FIRST ISSUE TO BE DECIDED IN THESE APPEALS IS AS TO WHETHER THE SERVICES RENDERED BY THE NON-RESIDENT ASSESSEE COMPANY TO INDIAN COMPANY WOULD FALL WITHIN THE AMBIT OF FEE FOR TECHNICAL SERVICES (FTS) IN THE FACTS AND CIRC UMSTANCES OF THE CASE. THE FACTS OF ASST YEAR 2010-11 ARE STATED HEREIN AND DECISION RENDERE D THEREON WOULD APPLY WITH EQUAL FORCE FOR THE ASST YEAR 2011-12 ALSO AS THE ISSUE INVOLVE D THEREIN IS IDENTICAL EXCEPT WITH VARIANCE IN FIGURES. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSES SEE COMPANY IS A TAX RESIDENT OF FINLAND AND IS ENGAGED INTER ALIA IN THE BUSINESS OF PROVID ING INNOVATIVE AND ENVIRONMENTALLY SOUND SOLUTIONS FOR A WIDE VARIETY OF CUSTOMERS IN METALS AND MINERAL PROCESSING INDUSTRIES. THE ASSESSEE FILED A NIL RETURN FOR THE ASST YEAR 2010- 11 ON 28.3.2012. DURING THE YEAR UNDER 2 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 CONSIDERATION THE ASSESSEE EARNED REVENUE FROM MAN AGEMENT SUPPORT AND OTHER SERVICES. THESE SERVICES ARE PROVIDED TO ITS GROUP COMPANY OU TOTEC INDIA PVT LTD AND THE REVENUE EARNED WAS RS. 82 22 381/-. THE LD AO PROPOSED TO BRING THIS AMOUNT TO TAX AS FEE FOR TECHNICAL SERVICES (FTS) . THE ASSESSEE CONTENDED BEFORE THE LD AO THAT THE SERVICES PROVIDED BY IT ARE MANAGERIAL SERVICES AND THESE SE RVICES FALL OUTSIDE THE DEFINITION OF FTS UNDER INDIA FINLAND DTAA. THE ASSESSEE ALSO CONTE NDED THAT NO SERVICES HAVE BEEN MADE AVAILABLE SO AS TO TAX THE AMOUNT AS FTS. 4. THE LD AO DID NOT ACCEPT THE CONTENTIONS OF TH E ASSESSEE AND HELD THAT THESE SERVICES CONSTITUTED FTS AND PASSED THE DRAFT ASSESSMENT ORD ER AGAINST WHICH THE ASSESSEE PREFERRED OBJECTIONS BEFORE THE HONBLE DISPUTE RESOLUTION PA NEL (DRP). THE LD DRP OBSERVED THAT THE TAXABILITY OF SERVICES RENDERED BY THE ASSESSEE TO ITS GROUP COMPANY REQUIRES TO BE EXAMINED IN ORDER TO ASCERTAIN THE TRUE NATURE OF T HE SERVICES GOING BY THE ESSENCE AND SUBSTANCE OF THE SERVICE TO DETERMINE THE CHARACTER OF THE INCOME. IT WENT TO EXAMINE THE SERVICE AGREEMENT ENTERED BY THE ASSESSEE WITH THE INDIAN GROUP COMPANY AND FOUND THAT THE FOLLOWING SERVICES WERE REQUIRED TO BE RENDERED BY THE ASSESSEE AS PER THE AGREEMENT :- (I) INTERNAL COMMUNICATION SERVICES (II) EXTERNAL COMMUNICATION SERVICES (III) MARKETING COMMUNICATION SERVICES (IV) FINANCE AND TREASURY SERVICES (V) TAX SERVICES (VI) ACCOUNTING SERVICES (VII) HUMAN RESOURCE SERVICES (VIII) LEGAL SERVICES (IX) BUSINESS DEVELOPMENT SERVICES (X) BUSINESS INTELLIGENCE SERVICES (XI) MARKETING DEVELOPMENT SERVICES (XII) IT INFRASTRUCTURE SERVICES (XIII) IT INFRASTRUCTURE SPECIAL SERVICES (XIV) IT APPLICATION SERVICES (XV) RESEARCH AND TECHNOLOGY SERVICES (XVI) AFTER SALES SERVICES 4.1. THE LD DRP OBSERVED THAT THE INVOICES FURNISH ED INDICATED THAT SERVICES HAVE BEEN PROVIDED BY THE ASSESSEE TO ITS GROUP COMPANY FOR I T SERVICES SETTING UP OF IT INFRA AND ALSO OTHER SERVICES WHICH HAVE BEEN SIMPLY DESCRIBE D AS SERVICE FEE. THE LD DRP 3 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 OBSERVED THAT THE ABSENCE OF SPECIFIC NATURE OF SER VICE FEE IN THE INVOICES CAN LEAD TO ASSUMPTION THAT ALL THE NATURE OF SERVICES HAVE BEE N RENDERED BY THE ASSESSEE. THE WIDE GAMUT OF SERVICES INCLUDES CREATING CORRESPONDENCE LETTERS TRAINING THE GROUP COMPANIES EDITORS TO USE THE PUBLISHING TOOLS SO THAT THE GRO UP COMPANIES CAN CREATE OWN CONTENT ON THE GLOBAL INTRANET WRITING ARTICLES OF THE PROJEC TS AND TECHNOLOGIES OF THE GROUP COMPANIES FOR THE WEB SITE AND TRADE PRESS PREPARING COMPANY PRESENTATIONS FOR THE GROUP COMPANIES TO BE USED FOR MARKETING PURPOSES CONSULTANCY OF T HE GROUP COMPANIES IN THEIR FINANCIAL RISK NEGOTIATING AND / OR MONITORING THE GROUP COM PANIES LOCAL EXTERNAL LOAN AGREEMENTS AND TERMS CONSULTATION IN HOME AND HOST COUNTRY TA X MATTERS IN LOCAL CORPORATE TAX PROJECT TAX AND VALUE ADDED TAX MATTERS ASSISTANCE IN LOCA L TAX AUDIT PROCESSES TRAINING IN TAX MATTERS HUMAN RESOURCE SERVICES ADVISES IN HR LE GAL SERVICES MAKING AVAILABLE DEVELOPING AND MAINTAINING AGENCY AND MARKETING COM PANY NETWORK FOR THE GROUP COMPANIES MAKING MARKET AREA REPORTS FOR THE GROUP COMPANIES QUARTERLY ETC. IT OBSERVED THAT THE ABOVE NATURE OF SERVICES CLEARLY INDICATE THAT :- (A) THESE SERVICES FALL UNDER THE CATEGORY OF CONSULTAN CY SERVICES. (B) THE SERVICES WITH REGARD TO IT INFRA SET UP FALL UN DER THE CATEGORY OF TECHNICAL SERVICES WHICH WAS ALSO ADMITTED BY THE ASSESSEE. (C) THE REPORTS ON MARKETING HR SERVICES ARE DEFINITEL Y USEFUL FOR THE INDIAN GROUP COMPANY WHICH DEFINITELY CAN USE ON ITS OWN LATER W HICH SATISFY THE MAKE AVAILABLE CLAUSE. (D) THE TRAINING SERVICES AMOUNT TO PROVISION OF MANPOW ER SERVICES AND THE CITUS OF MANPOWER PROVISION IS NOT RELEVANT. 4.2. ACCORDINGLY IT HELD THAT THE SERVICES RENDE RED BY THE ASSESSEE COMPANY TO BE FTS AND ACCORDINGLY UPHELD THE ACTION OF THE LD AO IN T AXING THE SAME IN THE SUMS OF RS. 82 22 381/- AND RS. 1 66 45 061/- FOR THE ASST YEAR S 2010-11 AND 2011-12 RESPECTIVELY. 5. AGGRIEVED THE ASSESSEE IS IN APPEALS BEFORE U S ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW FINAL ASSESSMENT ORDER PASSED IN PURSUANCE TO THE DIRECTIONS ISSUED BY THE LEARNED DISPUTE RESOLUTION PANEL ('LD DRP') IS A VITIATED ORDER AS THE LD. DRP HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION MADE BY THE LEARNED DEPUTY DIRECTOR OF INC OME-TAX (LT) 2(1) KOLKATA ('LD. AO') TO THE APPELLANT'S INCOME. 4 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 TAXABILITY OF INCOME RECEIVED FROM PROVISION OF SER VICES TO INDIAN COMPANY 2(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD AO ERRED IN HOLDING AND LD DRP ERRED IN CONFIRMING THAT THE REVENUE EARNED BY THE APPELLANT IN RESPECT OF MANAGEMENT SUPPORT AND OTHER SERVICES ARE TAXABLE A S FEES FOR TECHNICAL SERVICES ('FTS') UNDER THE PROVISIONS OF ARTICLE 13 OF THE INDIA-FIN LAND DOUBLE TAXATION AVOIDANCE AGREEMENT AS APPLICABLE FOR THE SUBJECT YEAR ('DTAA') 2 (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LD. AO/ DRP FAILED TO APPRECIATE THAT THE SERVICES RENDERED BY THE APPELL ANT ARE PRE-DOMINANTLY 'MANAGERIAL' IN NATURE AND THAT THE TERM 'MANAGERIAL' HAS SPECIFICA LLY BEEN EXCLUDED FROM THE PURVIEW OF THE DEFINITION OF FTS UNDER ARTICLE 13 OF THE DTAA 2(C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD. AO/ DRP FAILED TO APPRECIATE THAT THE SERVICES RENDERED BY THE APPELL ANT DO NOT 'MAKE AVAILABLE' ANY TECHNICAL KNOWLEDGE EXPERIENCE SKILL KNOW-HOW OR PROCESSES BASED ON THE INCORRECT UNDERSTANDING OF THE NATURE OF THE SERVICES PROVIDED BY THE APPELLAN T. 2(D) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD AO/ DRP ERRED IN HOLDING THAT THE MEANING OF THE TERM 'MAKE AVAILABL E' UNDER THE DTAA CANNOT BE DRAWN FROM THE PROTOCOL TO THE DOUBLE TAXATION AVOIDANCE AGREE MENT ENTERED INTO BETWEEN INDIA AND UNITED STATES OF AMERICA. 2(E) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD. AO/DRP ERRED IN HOLDING THAT VARIOUS JUDGMENTS RELIED ON BY THE APP ELLANT ARE DISTINGUISHABLE ON FACTS AND THUS NOT APPLICABLE IN THE CASE OF THE APPELLANT. SIMILAR GROUNDS WERE RAISED BY THE ASSESSEE FOR THE ASST YEAR 2011-12 WHICH ARE NOT REPRODUCED HEREIN FOR THE SAKE OF BREVITY. 6. THE LD AR ARGUED THAT THE NATURE OF SERVICES P ROVIDED BY ASSESSEE TO OUTOTEC INDIA PVT LTD IS PRIMARILY MANAGERIAL IN NATURE. THE W ORD MANAGERIAL HAS NOT BEEN USED IN THE DEFINITION OF FTS PROVIDED UNDER ARTICLE 13(4) OF THE DTAA (AS APPLICABLE DURING THE FY 2010-11 AND FY 2011-12) AND HENCE SUCH SERVICES DO NOT FALL UNDER THE AMBIT OF FTS. WHEREVER THE INTENTION OF ALL THE COUNTRIES IS TO I NCLUDE MANAGERIAL SERVICES THE SAME HAS BEEN EXPRESSLY PROVIDED SUCH AS INDIA-SINGAPORE DT AA INDIA FRANCE DTAA ETC. IN THE AMENDED INDIA FINLAND DTAA WHICH HAS COME INTO FOR CE W.E.F. 1.4.2011 THE WORD MANAGERIAL HAS BEEN INCLUDED UNDER THE DEFINITION OF FTS WHICH ITSELF PROVES THAT UNDER THE OLD DTAA SUCH SERVICES WERE NOT INCLUDED. SE CONDLY THE SERVICES RENDERED TO OUTOTEC INDIA PVT LTD AND OTHER INDIAN PARTIES FOR ASST YEAR 2010-11 DO NOT MAKE AVAILABLE TECHNICAL KNOW-HOW SKILLS TO THE RECIPI ENTS. THE MEANING OF WORD MAKE AVAILABLE HAS NOT BEEN DEFINED IN INDIA FINLAND DTAA AND HENCE THE LD AR PLACED RELIANCE ON THE PROTOCOL TO THE INDIA USA DTAA WHI CH HAS A SIMILAR PROVISION TO DETERMINE THE MEANING OF MAKE AVAILABLE. HE ARGU ED THAT THE LD AO CONTENDED THAT THE 5 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 MEANING OF MAKE AVAILABLE FROM INDIA-US TREATY CA NNOT BE DRAWN INTO INDIA FINLAND TREATY BY RELYING ON THE DECISION OF AUTHORITY OF ADVANCE RULINGS (AAR) IN T HE CASE OF PERFETTIE VAN MELLE HOLDING B.V. REPORTED IN (2012- 342 ITR 0200 AAR) WHEREIN IT WAS HELD THAT THE PROTOCOL TO INDO-US TREATY CANNOT BE IMPORTED INTO INDIA NETHERLAND TREATY TO UNDERSTAND THE MEANING OF MAKE AVAILABLE. THE L D AR ARGUED THAT THIS DECISION HAS BEEN OVERRULED BY THE HONBLE DELHI HIGH COURT IN THE SA ME CASE OF PERFETTI VAN MELLE HOLDING B.V. VS AAR REPORTED IN (2014) 52 TAXMANN.COM 161 ( DELHI) VIDE ORDER DATED 30.9.2014. ACCORDINGLY BY PLACING RELIANCE ON THIS DELHI HIGH COURT DECISION THE LD AR ARGUED THAT THE MEANING OF MAKE AVAILABLE AS MENTIONED IN PRO TOCOL TO INDIA USA TREATY COULD BE USED IN INDIA-FINLAND TREATY. THE LD AR ALSO ARGUE D THAT THE CONTENTION OF THE LD AO THAT RELIANCE CANNOT BE PLACED ON INDIA-USA DTAA TO UNDE RSTAND THE MEANING OF MAKE AVAILABLE IS IN CONTRAVENTION WITH THE THIRD MEMBE R DECISION OF THIS TRIBUNAL IN THE CASE OF CESC LTD VS DCIT REPORTED IN (2003) 87 ITD 653 (KOL ITAT) (TM ) . THE LD AR ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPO RT OF THIS ARGUMENT :- (A) INTERTEK TESTING SERVICES INDIA (P) LTD REPORTE D IN (2008) 175 TAXMAN 375 (AAR-NEW DELHI) IN A.A.R. NO. 751 OF 2007 DATED 7.1 1.2008 (B) RAYMOND LIMITED VS DCIT REPORTED IN (2003) 86 I TD 791 (MUMB ITAT) HE ARGUED THAT THE MAKE AVAILABLE TEST AS STATED IN ARTICLE 13 OF INDIA FINLAND DTAA IS NOT SATISFIED IN THE INSTANT CASE. HE ALSO PLACED RELI ANCE ON THE EXPRESSION MAKE AVAILABLE BEING EXPLAINED BY WAY OF EXAMPLES IN THE PROTOCOL TO INDIA USA DTAA WHICH HAS A SIMILAR PROVISION IN SUPPORT OF HIS CONTENTIONS. H E ALSO PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF BATLIVALA & KARANI SECURITIES (INDIA) (P) LTD VS DCIT REPORTED IN (2016) 71 TAXMANN.COM 1 42 (KOLKATA-TRIB) DATED 8.7.2016 . 7. IN RESPONSE TO THIS THE LD DR ARGUED THAT THE MEANING OF MAKE AVAILABLE GIVEN BY WAY OF VARIOUS EXAMPLES IN PROTOCOL TO INDO-US TREA TY SHOULD NOT BE IMPORTED IN THE INDIA- FINLAND TREATY. IN SUPPORT OF WHICH HE PLACED REL IANCE ON THE DECISION OF THE AUTHORITY OF ADVANCE RULINGS IN THE CASE OF PERFETTIE VAN MELLE HOLDING B.V. REPORTED IN (2012- 342 ITR 0200 AAR). HE ARGUED THAT IN THE INSTANT CASE THE SERVICES R ENDERED BY THE ASSESSEE SQUARELY FALLS WITHIN THE AMBIT OF FTS AS PER THE T REATY AND THE TECHNOLOGY IS ALSO MADE AVAILABLE TO THE INDIAN GROUP COMPANY AS HAS BEEN H ELD BY THE LD DRP. HE PLACED RELIANCE 6 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 ON THE DECISION OF THE CHENNAI TRIBUNAL IN THE CASE OF FOSTER WHEELER FRANCE S.A. VS DDIT REPORTED IN (2016) 67 TAXMANN.COM 120 (CHENNAI TRIB ) DATED 5.2.2016 AND THE DECISION OF COCHIN TRIBUNAL IN THE CASE OF US TECHNOLOGY RESOURCES (P.) LTD. V. ASSTT. CIT REPORTED IN (2013) 39 TAXMANN.COM 23 (COCHIN TRIB) IN SUPPORT OF HIS ARGUMENTS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ESSENCE OF THE ARGUMENTS OF THE AS SESSEE BEFORE THE LOWER AUTHORITIES AND BY LD AR BEFORE US ARE TWO FOLD:- (I) THE SERVICES UNDER THE AGREEMENT ARE NOT TECHNICAL OR CONSULTANCY IN NATURE AND (II) THE SERVICES ARE NOT MADE AVAILABLE BY THE ASS ESSEE THE ARGUMENTS OF THE LD DRP AND LD DR BEFORE US COU LD BE BRIEFLY SUMMARIZED AS UNDER:- (I) THE SERVICES RENDERED BY THE ASSESSEE ARE TECHNICAL IN NATURE AND MAKE AVAILABLE TECHNICAL KNOWLEDGE SKILL PROCESS ETC SINCE THE S ERVICES ARE CAPABLE OF BEING REPLICATED BY OUTOTEC INDIA PVT LTD THROUGH ITS OWN PERSONNEL (II) THE MEANING OF THE TERM MAKE AVAILABLE CANNO T BE DRAWN FROM THE INDIA US PROTOCOL AS TREATY WITH ONE COUNTRY CANNOT BE INTER PRETED IN THE LIGHT OF THE TREATY WITH ANOTHER COUNTRY. 8.1. WE FIND THAT THE SERVICES RENDERED BY THE AS SESSEE SQUARELY FALLS WITHIN THE DEFINITION OF FEE FOR TECHNICAL SERVICES AS PER THE PROVISIO NS OF THE ACT ON WHICH POINT THERE IS NO DISPUTE BY BOTH THE SIDES. THE ONLY DISPUTE IS WH ETHER THE SAME WOULD FALL UNDER FTS AS PER DTAA OR NOT. ALTHOUGH VARIOUS ARGUMENTS WERE ADVANCED BY BOTH THE SIDES WITH REGARD TO INCLUSION OF THE TERM MANAGERIAL IN IND IA FINLAND DTAA TO DECIDE WHETHER THE SERVICES RENDERED WOULD FALL WITHIN THE AMBIT OF F EE FOR TECHNICAL SERVICES WE DEEM IT FIT AND APPROPRIATE TO IGNORE THE SAME AND DECIDE THE I SSUE BEFORE US BY DECIDING ON THE BASIS OF MAKE AVAILABLE CLAUSE OF ANY TECHNICAL KNOWLEDGE SKILL ETC BY APPLYING THE DTAA. WE FIND THAT THE LD DRP IS HARPING ON THE POINT THAT T HE EXPERTISE OF THE ASSESSEE WHICH WAS USED IN THE FIELDS OF MARKETING SERVICES WHICH IS I N ITS OWN DOMAIN OF METAL INDUSTRY WILL DEFINITELY BE A TECHNICAL AND CONSULTANCY SERVICE. THIS OBSERVATION IS MADE BECAUSE ACCORDING TO LD DRP WHEN MARKETING INFORMATION W EB CONTENT CUSTOMIZED SOFTWARE SPECIFIC TO THE GROUP CONCERNS AVAILABLE THROUGH WA N CONSIDERATION FOR THESE PAYMENTS 7 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 WILL DEFINITELY BE FEES FOR TECHNICAL SERVICES AND THE INFORMATION MADE AVAILABLE TO THE INDIAN GROUP CONCERN IS CLEARLY CAPABLE OF REPLICAT ING THE SERVICES THROUGH ITS OWN PERSONNEL. ACCORDINGLY THE LD DRP CONCLUDED THAT T HE MAKE AVAILABLE CLAUSE IS SATISFIED IN THE INSTANT CASE. 8.2. AT THIS JUNCTURE IT WOULD BE PERTINENT TO G ET INTO THE DEFINITION OF FTS AS PER THE INDIA FINLAND TREATY WHICH IS REPRODUCED HEREUNDER: - ARTICLE 13 ROYALTIES AND FEES FOR TECHNICAL SERVI CES 4. FOR THE PURPOSES OF PARAGRAPH 2 OF THIS ARTICL E AND SUBJECT TO PARAGRAPH 5 THE TERM FEES FOR TECHNICAL SERVICES MEANS PAYMENTS O F ANY KIND OF ANY PERSON IN CONSIDERATION FOR THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONN EL) WHICH; (A) ARE ANCILLARY AND SUBSIDIARY TO THE APPLICATION OR ENJOYMENT OF THE RIGHT PROPERTY OR INFORMATION FOR WHICH A PAYMENT DESCRIB ED IN SUB-PARAGRAPH (A) OF PARAGRAPH 3 OF THIS ARTICLE IS RECEIVED; OR (B) ARE ANCILLARY AND SUBSIDIARY TO THE ENJOYMENT OF TH E PROPERTY FOR WHICH A PAYMENT DESCRIBED IN SUB-PARAGRAPH (B) OF PARAGRAPH 3 OF THIS ARTICLE IS RECEIVED; OR (C) MAKE AVAILABLE TECHNICAL KNOWLEDGE EXPERIENCE SKI LL KNOW-HOW OR PROCESSES OR CONSIST OF THE DEVELOPMENT AND TRANSFER OF A TEC HNICAL PLAN OR TECHNICAL DESIGN. IN OUR CONSIDERED VIEW IN ORDER TO BE COVERED BY T HE PROVISIONS OF ARTICLE 13(4) OF THE INDIA FINLAND DTAA NOT ONLY THE SERVICES SHOULD BE OF T ECHNICAL IN NATURE BUT SUCH AS TO RESULT IN MAKING THE TECHNOLOGY AVAILABLE TO THE PERSON RE CEIVING THE TECHNICAL SERVICES. WE ALSO AGREE THAT MERELY BECAUSE THE PROVISION OF THE SERV ICE MAY REQUIRE TECHNICAL INPUT BY THE PERSON PROVIDING THE SERVICE IT CANNOT BE SAID THA T TECHNICAL KNOWLEDGE SKILLS ETC ARE MADE AVAILABLE TO THE PERSON PURCHASING THE SERVICE. AS TO WHAT ARE THE CONNOTATIONS OF MAKING THE TECHNOLOGY AVAILABLE TO THE RECIPIENT OF TECHNI CAL SERVICES AS IS APPROPRIATELY SUMMED UP IN PROTOCOL TO INDO -US DTAA GENERALLY SPEAKI NG TECHNOLOGY WILL BE CONSIDERED MADE AVAILABLE WHEN THE PERSON ACQUIRING THE SERV ICE IS ENABLED TO APPLY THE TECHNOLOGY. RELIANCE IN THIS REGARD HAS BEEN RIGHTLY PLACED BY THE LD AR ON THE THIRD MEMBER DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CESC LTD VS DCIT REPORTED IN 87 ITD 653. IT HAS BEEN HELD BY VARIOUS JUDICIAL FORUMS THAT T HE PRINCIPLE OF PARALLEL TREATY INTERPRETATION IS PERMISSIBLE WHERE LANGUAGE OF THE TWO TREATIES IS SIMILARLY WORDED AND ONE 8 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 TREATY CLARIFIES MEANING OF THE TERMS (OR LANGUAGE) USED . RELIANCE IS PLACED ON THE FOLLOWING DECISIONS IN THIS REGARD:- (A) NATIONAL ORGANIC CHEMICALS INDUSTRIES LTD VS DCIT R EPORTED IN (2006) 5 SOT 317 (MUMBAI ITAT) (B) DDIT VS PREROY A.G. REPORTED IN (2010) 39 SOT 187 ( MUM ITAT) (C) INTERTEK TESTING SERVICES INDIA (P) LTD IN RE REPOR TED IN (2008) 307 ITR 418 (AAR NEW DELHI) DATED 7.11.2008 (D) ITO VS NOKIA INDIA (P) LTD REPORTED IN (2015) 59 TA XMANN.COM 120 (DELHI TRIB) DATED 8.7.2015 (E) STERIA (INDIA) LTD VS CIT REPORTED IN (2016) 38 6 ITR 390 (DEL HC) 8.3. WE FIND THAT THE CO-ORDINATE BENCH DECISION O F THIS TRIBUNAL IN THE CASE OF BATLIVALA & KARANI SECURITIES (INDIA) (P) LTD VS DCIT REPORTED IN (2016) 71 TAXMANN.COM 142 (KOLKATA-TRIB) DATED 8.7.2016 HAD HELD AS UNDER:- 12.1. WE FIND THAT THE MOOT QUESTION TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE PAYMENTS MADE BY THE ASSESSEE TO ITS FOREIGN SU BSIDIARIES WOULD FALL UNDER THE AMBIT OF FEES FOR TECHNICAL SERVICES AS PER THE D TAA. WE FIND FROM THE ARTICLE 12 OF SINGAPORE TREATY AND ARTICLE 13 OF THE UK TREATY DE FINING THE TERM FEES FOR TECHNICAL SERVICES THE CONSIDERATION PAID FOR RE NDERING OF MANAGERIAL TECHNICAL OR CONSULTANCY SERVICES WOULD BE COVERED UNDER THE SAI D DEFINITION ONLY IF SUCH SERVICES MAKE AVAILABLE ANY TECHNICAL KNOWLEDGE EXPERIENCE KNOWHOW OR PROCESSES. THE NATURE OF SERVICES RENDERED BY THE SUBSIDIARIES TO THE ASSESSEE WERE IN RESPECT OF SIMPLE MARKETING SERVICES OF INTRODUCING FOREIGN IN STITUTIONAL INVESTORS TO INVEST IN THE CAPITAL MARKETS IN INDIA SO THAT THE ASSESSEE W OULD IMPROVE ITS BUSINESS AND INCOME IN INDIA. WE FIND THAT NO TECHNICAL SERVICE IS BEING MADE AVAILABLE TO THE ASSESSEE BY ITS SUBSIDIARIES AND AS A RESULT THE P AYMENTS MADE TO SUBSIDIARIES WOULD NOT FALL WITHIN THE DEFINITION OF FEES FOR TECHNICA L SERVICES AS ADMITTEDLY NO TECHNICAL KNOWLEDGE WAS MADE AVAILABLE TO THE ASSESSEE BY THE SUBSIDIARIES. 12.2. ARTICLE 12(4) AND 13(4) OF THE SINGAPORE AND UK TREATY RESPECTIVELY REPRODUCED HEREINABOVE IS THE SAME AS ARTICLE 12(4) (B) OF DTAA BETWEEN INDIA AND USA. IN THE MEMORANDUM OF UNDERSTANDING TO THE DTA A BETWEEN INDIA AND USA A DESCRIPTION CONCERNING FEES FOR INCLUDED SERVICES I N ARTICLE 12 AND PARAGRAPH 4 (IN GENERAL) HAVE BEEN GIVEN. EXAMPLES OF SERVICES INTE NDED TO BE COVERED WITHIN THE DEFINITION OF INCLUDED SERVICES AND THOSE INTENDED TO BE EXCLUDED HAVE BEEN GIVEN. THE MEMORANDUM EXPLAINS HOW PARAGRAPH 4(B) OF ARTIC LE-12 HAS TO BE UNDERSTOOD. THE MEMORANDUM EXPLAINS THAT ARTICLE 12(4)(B) REFER S TO TECHNICAL OR CONSULTANCY SERVICES THAT MAKE AVAILABLE TO THE PERSON ACQUIRIN G THE SERVICES TECHNICAL KNOWLEDGE EXPERIENCE SKILL KNOW-HOW OR PROCESSE S OR CONSIST OF THE DEVELOPMENT AND TRANSFER OF A TECHNICAL PLANT OR TECHNICAL DESI GN TO SUCH PERSON. THE 9 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 MEMORANDUM EXPLAINS CATEGORY OF SERVICES REFERRED T O ARTICLE 12(4)(B) AS NARROWER THAN THE CATEGORY DESCRIBED IN PARAGRAPH 4(A) BECAU SE IT EXCLUDES ANY SERVICE THAT DOES NOT MAKE TECHNOLOGY AVAILABLE TO THE PERSON AC QUIRING THE SERVICE. IT FURTHER EXPLAINS THAT GENERALLY SPEAKING TECHNOLOGY WILL BE CONSIDERED MADE AVAILABLE WHEN THE PERSON ACQUIRING THE SERVICE IS ENABLED TO APPLY THE TECHNOLOGY . THE FACT THAT THE PROVISION OF THE SERVICE MAY REQUIRE TECHN ICAL INPUT BY THE PERSON PROVIDING THE SERVICE DOES NOT PER SE MEAN THAT TEC HNICAL KNOWLEDGE SKILLS ETC. ARE MADE AVAILABLE TO THE PERSON PURCHASING THE SERVICE WITHIN THE MEANING OF PARAGRAPH 4(B). SIMILARLY THE USE OF A PRODUCT WHI CH EMBODIES TECHNOLOGY SHALL NOT PER SE BE CONSIDERED TO MAKE THE TECHNOLOGY AVA ILABLE . THE MEMORANDUM FURTHER EXPLAINS WITH EXAMPLES AS TO HOW ARTICLE 12 (4)(B) HAS TO BE UNDERSTOOD AS FOLLOWS: TYPICAL CATEGORIES OF SERVICES THAT GENERALLY INVO LVE EITHER THE DEVELOPMENT AND TRANSFER OF TECHNICAL PLANTS OR TECHNICAL DESIGNS OR MAKING TECHNOLOGY AVAILABLE AS DESCRIBED IN PARAGRAPH 4(B) INCLUDE : 1. ENGINEERING SERVICES (INCLUDING THE SUB-CATEGORI ES OF BIO-ENGINEERING AND AERONAUTICAL AGRICULTURAL CERAMICS CHEMICAL CIV IL ELECTRICAL MECHANICAL METALLURGICAL AND INDUSTRIAL ENGINEERING) ; 2. ARCHITECTURAL SERVICES ; AND 3. COMPUTER SOFTWARE DEVELOPMENT. UNDER PARAGRAPH 4(B) TECHNICAL AND CONSULTANCY SER VICES COULD MAKE TECHNOLOGY AVAILABLE IN A VARIETY OF SETTINGS ACTIVITIES AND INDUSTRIES. SUCH SERVICES MAY FOR EXAMPLES RELATE TO ANY OF THE FOLLOWING AREAS : 1. BIO-TECHNICAL SERVICES ; 2. FOOD PROCESSING ; 3. ENVIRONMENTAL AND ECOLOGICAL SERVICES ; 4. COMMUNICATION THROUGH SATELLITE OR OTHERWISE ; 5. ENERGY CONSERVATION ; 6. EXPLORATION OR EXPLOITATION OF MINERAL OIL OR NA TURAL GAS ; 7. GEOLOGICAL SURVEYS ; 8. SCIENTIFIC SERVICES ; AND 9. TECHNICAL TRAINING. THE FOLLOWING EXAMPLES INDICATE THE SCOPE OF THE CO NDITIONS IN PARAGRAPH 4(B) : 10 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 EXAMPLE 3 FACTS : A U.S. MANUFACTURER HAS EXPERIENCE IN THE USE OF A PROCESS FOR MANUFACTURING WALLBOARD FOR INTERIOR WALLS OF HOUSES WHICH IS MOR E DURABLE THAN THE STANDARD PRODUCTS OF ITS TYPE. AN INDIAN BUILDER WISHES TO P RODUCE THIS PRODUCT FOR ITS OWN USE. IT RENTS A PLANT AND CONTRACTS WITH THE U.S. COMPAN Y TO SEND EXPERTS TO INDIA TO SHOW ENGINEERS IN THE INDIAN COMPANY HOW TO PRODUCE THE EXTRA-STRONG WALLBOARD. THE U.S. CONTRACTORS WORK WITH THE TECHNICIANS IN THE I NDIAN FIRM FOR A FEW MONTHS. ARE THE PAYMENTS TO THE U.S. FIRM CONSIDERED TO BE PAYM ENTS FOR INCLUDED SERVICES ? ANALYSIS : THE PAYMENTS WOULD BE FEES FOR INCLUDED SERVICES. T HE SERVICES ARE OF A TECHNICAL OR CONSULTANCY NATURE; IN THE EXAMPLE THEY HAVE ELEME NTS OF BOTH TYPES OF SERVICES. THE SERVICES MAKE AVAILABLE TO THE INDIAN COMPANY TECHN ICAL KNOWLEDGE SKILL AND PROCESSES. EXAMPLE 4 FACTS : A U.S. MANUFACTURER OPERATES A WALLBOARD FABRICATIO N PLANT OUTSIDE INDIA. AN INDIAN BUILDER HIRES THE U.S. COMPANY TO PRODUCE WALLBOARD AT THAT PLANT FOR A FEE. THE INDIAN COMPANY PROVIDES THE RAW MATERIALS AND THE U.S. MANUFACTURER FABRICATES THE WALLBOARD IN ITS PLANT USING ADVANCED TECHNOLO GY. ARE THE FEES IN THIS EXAMPLE PAYMENTS FOR INCLUDED SERVICES ? ANALYSIS : THE FEES WOULD NOT BE FOR INCLUDED SERVICES. ALTHOU GH THE U.S. COMPANY IS CLEARLY PERFORMING A TECHNICAL SERVICE NO TECHNICAL KNOWLE DGE SKILL ETC. ARE MADE AVAILABLE TO THE INDIAN COMPANY NOR IS THERE ANY D EVELOPMENT AND TRANSFER OF A TECHNICAL PLANT OR DESIGN. THE U.S. COMPANY IS MERE LY PERFORMING A CONTRACT MANUFACTURING SERVICE. EXAMPLE 5 FACTS : AN INDIAN FIRM OWNS INVENTORY CONTROL SOFTWARE FOR USE IN ITS CHAIN OF RETAIL OUTLETS THROUGHOUT INDIA. IT EXPANDS ITS SALES OPERATION BY EMPLOYING A TEAM OF TRAVELLING SALESMEN TO TRAVEL AROUND THE COUNTRYSIDE SELLING T HE COMPANYS WARES. THE COMPANY WANTS TO MODIFY ITS SOFTWARE TO PERMIT THE SALESMEN TO ASSESS THE COMPANYS CENTRAL COMPUTERS FOR INFORMATION ON WHAT PRODUCTS ARE AVAI LABLE IN INVENTORY AND WHEN THEY CAN BE DELIVERED. THE INDIAN FIRM HIRES A U.S. COMPUTER PROGRAMMING FIRM TO 11 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 MODIFY ITS SOFTWARE FOR THIS PURPOSE. ARE THE FEES WHICH THE INDIAN FIRM PAYS TREATED AS FEES FOR INCLUDED SERVICES ? ANALYSIS : THE FEES ARE FOR INCLUDED SERVICES. THE U.S. COMPAN Y CLEARLY PERFORMS A TECHNICAL SERVICE FOR THE INDIAN COMPANY AND IT TRANSFERS TO THE INDIAN COMPANY THE TECHNICAL PLAN (I.E. THE COMPUTER PROGRAMME) WHICH IT HAS DE VELOPED. EXAMPLE 6 FACTS : AN INDIAN VEGETABLE OIL MANUFACTURING COMPANY WANTS TO PRODUCE A CHOLESTEROL-FREE OIL FROM A PLANT WHICH PRODUCES OIL NORMALLY CONTAI NING CHOLESTEROL. AN AMERICAN COMPANY HAS DEVELOPED A PROCESS FOR REFINING THE CH OLESTEROL OUT OF THE OIL. THE INDIAN COMPANY CONTRACTS WITH THE U.S. COMPANY TO M ODIFY THE FORMULAS WHICH IT USES SO AS TO ELIMINATE THE CHOLESTEROL AND TO TRA IN THE EMPLOYEES OF THE INDIAN COMPANY IN APPLYING THE NEW FORMULAS. ARE THE FEES PAID BY THE INDIAN COMPANY FOR INCLUDED SERVICES ? ANALYSIS : THE FEES ARE FOR INCLUDED SERVICES. THE SERVICES AR E TECHNICAL AND THE TECHNICAL KNOWLEDGE IS MADE AVAILABLE TO THE INDIAN COMPANY. EXAMPLE 7 FACTS : THE INDIAN VEGETABLE OIL MANUFACTURING FIRM HAS MAS TERED THE SCIENCE OF PRODUCING CHOLESTEROL-FREE OIL AND WISHES TO MARKET THE PRODU CT WORLD WIDE. IT HIRES AN AMERICAN MARKETING CONSULTING FIRM TO DO A COMPUTER SIMULATION OF THE WORLD MARKET FOR SUCH OIL AND TO ADVERSE IT ON MARKETING STRATEG IES. ARE THE FEES PAID TO THE U.S. COMPANY FOR INCLUDED SERVICES ? ANALYSIS : THE FEES WOULD NOT BE FOR INCLUDED SERVICES. THE AM ERICAN COMPANY IS PROVIDING A CONSULTANCY SERVICE WHICH INVOLVES THE USE OF SUBST ANTIAL TECHNICAL SKILL AND EXPERTISE. IT IS NOT HOWEVER MAKING AVAILABLE TO THE INDIAN COMPANY ANY TECHNICAL EXPERIENCE KNOWLEDGE OR SKILL ETC. NOR IS IT TRA NSFERRING A TECHNICAL PLAN OR DESIGN. WHAT IS TRANSFERRED TO THE INDIAN COMPANY THROUGH T HE SERVICE CONTRACT IS COMMERCIAL INFORMATION. THE FACT THAT TECHNICAL SKI LLS WERE REQUIRED BY THE PERFORMER OF THE SERVICE IN ORDER TO PERFORM THE CO MMERCIAL INFORMATION SERVICE DOES NOT MAKE THE SERVICE A TECHNICAL SERVICE WITHIN THE MEANING OF PARAGRAPH 4(B). PARAGRAPH 5 12 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 PARAGRAPH 5 OF ARTICLE 12 DESCRIBES SEVERAL CATEGOR IES OF SERVICES WHICH ARE NOT INTENDED TO BE TREATED AS INCLUDED SERVICES EVEN IF THEY SATISFY THE TESTS OF PARAGRAPH 4. SET FORTH BELOW ARE EXAMPLES OF CASES WHERE FEES WOULD BE INCLUDED UNDER PARAGRAPH 4 BUT ARE EXCLUDED BECAUSE OF THE CONDIT IONS OF PARAGRAPH 5. 12.2.1. THE MEMORANDUM OF UNDERSTANDING IS A TOOL T O UNDERSTAND AS TO WHAT MEANING WAS INTENDED TO BE CONVEYED IN THE DTAA BET WEEN COUNTRIES. SINCE THE WORDING OF ARTICLE 12(4) AND 13(4) OF THE TREATY WI TH SINGAPORE AND UK RESPECTIVELY AND ARTICLE 12(4)(B) OF THE DTAA BETWEEN INDIA AND US ARE IDENTICAL THE MOU TO THE INDO-US TREATY CAN BE LOOKED INTO TO SEE WHAT M EANING INDIA AND SINGAPORE / UK (AS THE CASE MAY BE) WOULD HAVE CONTEMPLATED IN THE TREATY. THE LAW IS SETTLED THAT A DTAA WITH ONE COUNTRY CAN BE COMPARED WITH THE DTAA WITH ANOTHER COUNTRY IN CASE OF AMBIGUITY AND IN ORDER TO UNDERSTAND THE TR UE SCOPE AND MEANING OF THE CONCERNED DTAA. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF A.E.G. TELEFUNKEN V. CIT [1998] 231 ITR 129 COMPARED THE DTAA WITH GERMAN DEMOCRATIC REPUBLIC WITH THE DTAA WITH FINLAND TOW ARDS THIS END. 12.2.2. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CAS E OF RAYMOND LTD. VS. DCIT 86 ITD 791 (MUM) HAD TO DEAL WITH A CASE OF PAYMENT OF COMMISSION BY AN INDIAN COMPANY TO A NON RESIDENT IN CONNECTION WITH PUBLIC ISSUE OF GLOBAL DEPOSITORY RECEIPTS (GDR) FOR SERVICES RENDERED OUTSIDE INDIA. THE QUESTION BEFORE THE TRIBUNAL WAS WHETHER THE COMMISSION SO PAID CAN BE SAID TO BE FEES FOR INCLUDED SERVICES I.E. FEES FOR TECHNICAL SERVICES UNDER A RTICLE 13(4)(C) OF THE INDO-UK DTAA WHICH IS THE SAME AS THAT OF ARTICLE 12(4)(B) OF THE TREATY BETWEEN INDIA AND SINGAPORE. AFTER CONSIDERING ARTICLE 12(4)(B) OF T HE INDO-US DTAA (WHICH ARE SIMILAR TO ARTICLE 12(4) AND 13(4) OF THE TREATY BE TWEEN INDIA AND SINGAPORE / UK (AS THE CASE MAY BE)) AND AFTER REFERRING TO THE MEMOR ANDUM OF UNDERSTANDING TO THE INDO-US DTAA THE TRIBUNAL HELD AS FOLLOWS: WHEREAS SECTION 9(1)(VII) OF THE ACT STOPS WITH T HE RENDERING OF TECHNICAL SERVICES THE DTAA GOES FURTHER AND QUALIFIES SUCH RENDERING OF SERVICES WITH WORDS TO THE EFFECT THAT THE SERVICES SHOULD ALSO M AKE AVAILABLE TECHNICAL KNOWLEDGE EXPERIENCE SKILLS ETC. TO THE PERSON UT ILIZING THE SERVICES. THESE WORDS ARE WHICH MAKE AVAILABLE. THE NORMAL PLA IN AND GRAMMATICAL MEANING OF THE LANGUAGE EMPLOYED IN OUR UNDERSTAND ING IS THAT A MERE RENDERING OF SERVICES IS NOT ROPED IN UNLESS THE PE RSON UTILIZING THE SERVICES IS ABLE TO MAKE USE OF THE TECHNICAL KNOWLEDGE ETC. BY HIMSELF IN HIS BUSINESS OR FOR HIS OWN BENEFIT AND WITHOUT RECOURSE TO THE PER FORMER OF THE SERVICES IN FUTURE. THE TECHNICAL KNOWLEDGE EXPERIENCE SKILL ETC. MUST REMAIN WITH THE PERSON UTILIZING THE SERVICES EVEN AFTER THE RENDER ING OF THE SERVICES HAS COME TO AN END. A TRANSMISSION OF THE TECHNICAL KNOWLEDG E EXPERIENCE SKILLS ETC. FROM THE PERSON RENDERING THE SERVICES TO THE PERSO N UTILIZING THE SAME IS CONTEMPLATED BY THE ARTICLE. SOME SORT OF DURABILIT Y OR PERMANENCY OF THE RESULT OF THE RENDERING OF SERVICES IS ENVISAGED WHICH WILL REMAIN AT THE DISPOSAL OF THE PERSON UTILIZING THE SERVICES. THE FRUITS OF THE SERVICES SHOULD REMAIN AVAILABLE TO THE PERSON UTILIZING THE SERVIC ES IN SOME CONCRETE SHAPE SUCH AS TECHNICAL KNOWLEDGE EXPERIENCE SKILLS ETC . 13 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 12.3. APPLYING THE DEFINITION OF FTS IN THE TREATY TO THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE VARIOUS DECISIONS REFERRED TO ABOV E IT CANNOT BE SAID THAT THE RENDERING OF SERVICES BY THE SINGAPORE AND UK SUBSI DIARIES TO THE ASSESSEE MADE AVAILABLE TO THE ASSESSEE SUCH SERVICES FOR ITS FUTURE USE OR UTILIZATION ON A REASONABLY PERMANENT BASIS. HENCE THE CONSIDERATIO N PAID THEREON BY THE ASSESSEE WOULD NOT FALL UNDER THE AMBIT OF FEES FOR TECHNICA L SERVICES AS PER THE TREATY. 8.4. SIMILAR VIEWS WERE EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & ORS VS DE BEERS INDIA MINERALS (P) LTD REPORT ED IN (2012) 346 ITR 467 (KAR) WHEREIN IT WAS HELD THAT :- IF THE ASSESSEE IS ABLE TO CARRY ON HIS BUSINESS IN FUTURE WITHOUT THE TECHNICAL SERVICE OF THE SERVICE PROVIDER IN RESPECT OF SERVICES REND ERED THEN IT WOULD BE SAID THAT TECHNICAL KNOWLEDGE IS MADE AVAILABLE FURGO HAS N OT MADE AVAILABLE THE TECHNICAL KNOWLEDGE WITH WHICH THEY RENDERED TECHNICAL SERVIC E THOUGH FURGO RENDERED TECHNICAL SERVICES AS DEFINED UNDER SECTION 9(1)(VI I) EXPLANATION 2 IT DOES NOT SATISFY THE REQUIREMENT OF TECHNICAL SERVICES AS CONTAINED IN DTAA LIABILITY OF TAX IS NOT ATTRACTED THE CASE ON HAND DOES NOT FALL IN THE S ECOND PART OF THE FEE FOR TECHNICAL SERVICES CLAUSE IN DTAA DEALING WITH DEVELOPMENT A ND TRANSFER OF PLANS AND DESIGNS BOTH THE SUBSTANTIAL QUESTIONS OF LAW ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE APPEAL DISMISSED. 8.5. WE FIND IN THE INSTANT CASE FROM THE NATUR E OF SERVICES RENDERED BY THE ASSESSEE TO THE INDIAN GROUP COMPANY THERE IS NO TECHNOLOGY OR TECHNICAL KNOWHOW SKILLS ETC THAT WERE MADE AVAILABLE BY THE ASSESSEE IN ORDER TO ENA BLE THE INDIAN GROUP COMPANY TO FUNCTION ON ITS OWN WITHOUT THE DEPENDENCE OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE AGREEMENT ENTERED BETWEEN OUTOTEC OYJ AND OUTOTEC I NDIA PVT LTD IS FOR AN INDEFINITE PERIOD AND SUCH SERVICES ARE PROVIDED ON RECURRING BASIS BY THE ASSESSEE TO OUTOTEC INDIA PVT LTD. WE FIND LOT OF FORCE IN THE ARGUMENT OF THE LD AR THAT HAD THE TECHNICAL KNOWHOW SKILLS ETC BEING MADE AVAILABLE BY THE ASSESSEE TO OUTOTEC INDIA PVT LTD THEN THERE WOULD BE NO NEED FOR OUTOTEC INDIA PVT LTD TO RECOURSE TO TH E RECIPIENT FOR THESE SERVICES. WE ALSO HOLD THAT THE OTHER SERVICES SUCH AS IT INFRASTRUCT URE IT ADMINISTRATION (COLLECTIVELY REFERRED TO IT SUPPORT SERVICES ) ALSO DO NOT SATISFY THE MAKE AVAILABLE TEST AS NO TECHNOLOGY KNOWHOW SKILLS ETC WERE TRANSFERRED TO THE RECIPIE NT. WE ALSO HOLD THAT THE REPAIR AND SUPERVISION SERVICES PROVIDED TO FEW OTHER INDIAN P ARTIES DO NOT SATISFY THE MAKE AVAILABLE TEST AS THESE ARE ROUTINE REPAIRS AND SUPERVISORY S ERVICES AND THERE IS NO TRANSFER OF TECHNOLOGY OR SKILL OR EXPERIENCE AT THE TIME OF PR OVISION OF SUCH SERVICES BY THE ASSESSEE. 14 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 8.6. WE FIND THAT THE RELIANCE PLACED BY THE LD D R ON THE DECISION OF CHENNAI TRIBUNAL IN THE CASE OF FOSTER WHEELER FRANCE S.A. VS DDIT REPORTED IN (201 6) 67 TAXMANN.COM 120 (CHENNAI TRIB) DATED 5.2.2016 IS FACTUALLY DISTINGUISHABLE FROM THE FACTS OF THE INSTANT CASE. IN THE FACTS OF THE CASE BEFORE THE CHENNAI TRIBUNA L THE FOREIGN COMPANY REVIEWED THE EXECUTION PLANS EMPHASIZED ON KEY MILESTONES PROV IDED THE BEST PRACTICES AVAILABLE IN THE FORM OF WRITTEN PROCEDURES AND SPECIFICATIONS AND D ETAILS. WHEN THE PROCEDURES AND SPECIFICATIONS ARE PROVIDED TO THE ASSESSEE WHICH IS ALSO A SPECIALIZED COMPANY IN ENGINEERING AND EXECUTION OF CONSTRUCTION IT IS A CASE OF PROVIDING SPECIFICATIONS AND DETAILS EXECUTION OF ENGINEERING AND CONSTRUCTION CONTRACT. THESE SPECIFICATIONS AND PROCEDURES MADE AVAILABLE TO THE ASSESSEE BY FOREIG N COMPANY CAN VERY WELL BE USED BY THE ASSESSEE-COMPANY FOR EXECUTION OF OTHER PROJECTS AL SO. MOREOVER WHEN THE SPECIFICATIONS AND OTHER PROCEDURES ARE MADE AVAILABLE TO THE ASSE SSEE-COMPANY AND THE FOREIGN COMPANY IS REVIEWING AND TRACKING THE EXECUTION PLANS PERIO DICALLY NOT ONLY THE EXECUTION BUT ALSO THE PROJECT BUDGET AND CLIENT SATISFACTION IT WAS HELD BY THE TRIBUNAL THAT FOSTER WHEELER USA HAS MADE AVAILABLE ITS TECHNICAL KNOWLE DGE EXPERTISE KNOWHOW IN EXECUTION OF THE CONTRACT BY THE ASSESSEE IN INDIA. THE COMP ANY WAS RECEIVING TECHNICAL SERVICES LIKE SPECIFICATIONS PROCEDURES PROJECT MANAGEMENT ETC . AND IT WAS UTILIZING THE SAME IN THE PROJECT UNDERTAKEN WITH RELIANCE PETROLEUM LIMITED. THE SPECIFICATIONS TECHNICAL KNOWLEDGE ADVICE RECEIVED FROM FOSTER WHEELER FRAN CE S.A WAS VEY MUCH AVAILABLE WITH THE ASSESSEE- COMPANY AND IT CAN BE USED IN EXECUTI ON OF THE ENGINEERING AND CONTRACT WITH OTHER CLIENTS. IN THE INSTANT CASE BEFORE US AS ALREADY STATED WHAT WAS RENDERED WAS ONLY MANAGERIAL SERVICES WITHOUT ANY TRANSFER OF TECHNOL OGY KNOWHOW SKILLS ETC AND IT IS A RECURRING SERVICE YEAR AFTER YEAR. HENCE THE CASE RELIED UPON BY THE LD DR IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. 8.7. SIMILARLY THE DECISION OF COCHIN TRIBUNAL IN THE CASE OF US TECHNOLOGY RESOURCES (P.) LTD. V. ASSTT. CIT REPORTED IN (2013) 39 TAXMANN.COM 23 (C OCHIN TRIB) RELIED UPON BY LD DR IS FACTUALLY DISTINGUISHABLE IN AS MUCH AS IN THAT CASE THE INFORMATION EXPERTISE AND TRAINING PROVIDED BY US TECHNOLOGY RESOURCES HAD BE EN ABSORBED BY THE TAXPAYER IN ITS DECISION MAKING PROCESS AND UTILIZED FOR THE PURPOS E OF BUSINESS AND THEREFORE IT WAS HELD THAT THE EXPERTISE AND TECHNOLOGY WAS MADE AVAILABL E BY US ENTITY AND ACCORDINGLY HELD AS 15 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 FTS WITHIN THE MEANING OF ARTICLE 12(4)(B) OF TAX T REATY. IN THE INSTANT CASE BEFORE US THE SERVICES RENDERED ARE ONLY MANAGERIAL IN NATURE AND THERE IS NO TRANSFER OF ANY TECHNOLOGY KNOWHOW SKILLS PROCESSES ETC SO AS TO FALL UNDER THE AMBIT OF MAKE AVAILABLE CLAUSE AS PER THE TREATY. AS STATED ABOVE THE SERVICES REN DERED ARE RECURRING IN NATURE AND DOES NOT ENABLE THE INDIAN GROUP COMPANY TO FUNCTION ON ITS OWN BASED ON THE TECHNOLOGY KNOWHOW SKILLS ETC IF ANY TRANSFERRED PREVIOUSLY. HENCE THIS CASE RELIED UPON BY THE LD DR IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. 8.8. IN VIEW OF THE AFORESAID FACTS AND FINDINGS AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE WE HOLD THAT TH E AMOUNTS RECEIVED BY THE ASSESSEE FROM OUTOTEC INDIA PVT LTD DOES NOT QUALIFY AS FTS AS PE R THE DTAA. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD ARE ALLOWED F OR BOTH THE ASST YEARS. 9. THE NEXT GROUND TO BE DECIDED IN THESE APPEALS IS WITH REGARD TO CHARGEABILITY OF INTEREST U/S 234A AND 234 B OF THE ACT WHICH IS ONL Y CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 10. THE NEXT GROUND TO BE DECIDED IN THESE APPEALS IS WITH REGARD TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C ) OF THE ACT WHICH IS ONLY CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 11. THE LAST GROUND RAISED IN BOTH THE APPEALS ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 12. IN THE RESULT BOTH THE APPEALS OF THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.10.2016 SD/- SD/- (N.V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED : 14 TH OCTOBER 2016 JD.(SR.P.S.) 16 ITA NO.558/KOL/2014 & 462/KOL/2015 OUTOTEC OYJ AY 2010-11 & 2011-12 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT OUTOTEC OYJ C/O OUTOTEC INDIA PVT. LTD . 12 TH FLOOR SOUTH CITY PINNACLE PLOT NO.-XI BLOCK EP SECTOR- V SALT LAKE KOL-91. 2 RESPONDENT DDIT (IT)-2(1) KOLKATA. 3 . THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR KOLKATA BENCHES KOLKATA / TRUE COPY BY ORDER ASSTT. REGISTRAR .