CIT (IT) v. Deloitte Touche Tohmatsu(2023) 335 CTR 271/ (2024) 296 Taxman 104 (Delhi)(HC)

S. 9(1)(vii) : Income deemed to accrue or arise in India-Fees for technical services-Subscription fee-From members Non-commercial objectives, professional practices, and articles did not reflect any element of commerciality, subscription fee would not be in nature of FTS-Also exempt on principle of mutuality-DTAA-India-Switzerland.[S.4, 260A, Art. 6.2(a), 6(2)(b), 7.5, 12]

Dismissing the appeal of the Revenue the Court held that, it was found from articles of the assessee that all member firms contributed to a common fund for achieving common objectives i.e. non-commercial objectives, and that all member firms contributed towards budgeted operating expenses of the assessee and were entitled to proportionate share in surplus lying with assessee in case of dissolution. The sole objective of the assessee was to benefit its members) place of subscription to evolve better professional practices and articles did not reflect any element of commerciality between member and assessee. Since all three tests of mutuality were satisfied, receipts of the assessee from its members would not be in nature of FTS, and same would be exempt from tax having regard to the principle of mutuality.(AY. 2008-09 to 2011-12)