Assessee, a Hong Kong based company, which is engaged in business of distribution of telecommunication products.  During relevant assessment years, assessee received reimbursement of connectivity charges from its AE, Indian subsidiary for provision of connectivity services for international communication. Assessing Officer held that  the  assessee provided plethora of services to its AE right from negotiating agreements with third parties entering into purchase agreement, to issuing inspection certificates certifying products and services-He, thus held that these services would fall within ambit of technical consultancy’ or managerial services and would qualify as fees for technical services under section 9(1)(vii). DRP affirmed the order of the AO. On appeal the Tribunal held that   from purchasing service agreement between assessee and AE that all activities agreed to in writing by and between company and service provider were considered as steps involved in processing product purchased as per purchasing service agreement and could not be treated as other technical services. Since assessee was only paid for connectivity services which were merely ancillary to enabling provision of inter-connect services and part of processing product, same could not be treated as technical or managerial or consultancy services. Amount received by assessee could not be regarded as FTS under section 9(1)(vii) of the Act. (AY. 2018-19, 2019-20)