Home › Income-Tax Act › Aktiebolaget SKF v. Dy. CIT (2020) 181 ITD 695 / 207 TTJ 520 (Mum.)(Trib.)

Aktiebolaget SKF v. Dy. CIT (2020) 181 ITD 695 / 207 TTJ 520 (Mum.)(Trib.)

S. 9(1)(vii):Income deemed to accrue or arise in India – Fees for technical services -Technology collaboration and technical assistance agreement- Assessed as fees for technical services – DTAA -India – Sweden [S. 9(1) (vi) , Art , 12 ]

 Assessee entered into two agreements with its AE, i.e. technology collaboration and technical assistance agreement and service agreement as regards various services .  Said agreements were in force till assessment year 2011-12 .  During  year, said agreements were broken into three agreements i.e. trademark license agreement, technology license agreement and IT service delivery agreement . Assessee, in light of IT service delivery agreement, contended that same was a separate and distinct agreement from main royalty agreement (Technology collaboration and technical assistance agreement) and, thus, it did not come under definition of FTS provided under India-Sweden tax treaty . Assessing Officer held that  IT services rendered by assessee were subservient to royalty agreement and were ancillary and subsidiary to main royalty agreement entered into by both parties .  The Assessee filed an appeal before the DRP  . DRP affirmed the order of the Assessing Officer . On appeal  the  Tribunal affirmed the order of the Assessing Officer and held that  services rendered by assessee would be treated as fee for technical services .  (AY. 2013-14 ,  2014-15)

 Assessee entered into two agreements with its AE, i.e. technology collaboration and technical assistance agreement and service agreement as regards various services .  Said agreements were in force till assessment year 2011-12 .  During  year, said agreements were broken into three agreements i.e. trademark license agreement, technology license agreement and IT service delivery agreement . Assessee, in light of IT service delivery agreement, contended that same was a separate and distinct agreement from main royalty agreement (Technology collaboration and technical assistance agreement) and, thus, it did not come under definition of FTS provided under India-Sweden tax treaty . Assessing Officer held that  IT services rendered by assessee were subservient to royalty agreement and were ancillary and subsidiary to main royalty agreement entered into by both parties .  The Assessee filed an appeal before the DRP  . DRP affirmed the order of the Assessing Officer . On appeal  the  Tribunal affirmed the order of the Assessing Officer and held that  services rendered by assessee would be treated as fee for technical services .  (AY. 2013-14 ,  2014-15)