On writ petitions from the order of the Tribunal holding,  that the business income of the assessee was divisible under the Double Taxation Avoidance Agreement between India and the United Kingdom [1994] 206 ITR (St.) 235, though it arose out of a single contract, in view of articles 7 and 13 of the Double Taxation Avoidance Agreement, (b) that the services provided by the assessee to the Board of Control for Cricket in India under the service agreement qualified as fees for technical services in terms of article 13(4)(c) of the Double Taxation Avoidance Agreement, and in the alternative (c) whether the income determined as fees for technical services could be deemed to have accrued or arisen in India in terms of section 9(1)(vii)(b) of the Income-tax Act, 1961, especially when the services provided by the assessee during two assessment years, were utilized outside India by the Board of Control for Cricket in India, held, dismissing the petition, the Court held that the Tribunal founded its decision that the business income of the assessee was divisible under the Double Taxation Avoidance Agreement, having regard to articles 7 and 13 therein, on an admitted dichotomy between the functions performed and services rendered by IMG (UK) as distinguished from those discharged by its service permanent establishment. The Tribunal, while considering the functions performed by IMG UK, had linked them to the issue of their being “effectively connected” which was relevant for the purposes of article 13. The assessee alternated between articles 7 and 13 of the Double Taxation Avoidance Agreement. The Department while evaluating the attribution of income to the service permanent establishment question was necessarily constrained to bear in consideration the nature of services rendered by IMG UK as distinguished from those discharged by the service permanent establishment. The assessee had not questioned the fact that a part of the advisory work was undertaken by its UK office without the involvement of the service permanent establishment.  That in view of the existence of a service permanent establishment in the assessment years 2010-11 to 2018-19, the income attributable to that entity was correctly offered to tax under article 7 of the Double Taxation Avoidance Agreement since the Department was concerned with revenue earned from the rendering of services in India and which services, concededly, fell outside the ambit of article 13 of the Double Taxation Avoidance Agreement. In so far as the revenue attributable to the UK office was concerned, they did not qualify for taxation under article 13 of the Double Taxation Avoidance Agreement, since the “make available” test was not fulfilled. There was no justification to interfere with the findings and order of the Tribunal in this regard.  That the expression “fee for technical services” had been defined in article 13 of the Double Taxation Avoidance Agreement as consideration received for the rendering of any technical or consultancy services. In terms of paragraph (4) of article 13, the mere rendition of technical or consultancy service would in itself be insufficient, since paragraph (4)(c) stated an additional condition of the furnishing of such service, ultimately leading to technical knowledge, experience, skill, know-how or processes being made available. The mere rendition of technical or consultancy service would not lead to revenue, income or profits being placed under the broad head of fees for technical services unless the taxing authority additionally found that technical knowledge, skill, know-how or processes were made available, i. e., the imperative of the “make available” condition being met and the imperative of the knowledge, skill, know-how being made available to the payer.  That the mere usage or utilisation of technical or consultative material in aid of business would not be sufficient to attract article 13 of the Double Taxation Avoidance Agreement. Accepting the submission of the Department that handing over of research or advisory work were sufficient for the purposes of article 13, would render the “make available” condition comprised in para (4)(c) wholly redundant and otiose since the mere rendering of service would have sufficed. The tax was not dependent on the use of technology by the recipient. The “make available” prescription made a conscious distinction between a mere service provision and the impartation of lasting expertise. The offer of service or advice did not fundamentally alter the recipient’s capabilities. These services, while potentially valuable, did not endow the recipient with new skills or knowledge which could be independently deployed in the future. The kernel of “make available” must therefore be recognised to be a transfer of technology or skills rather than a temporary reliance on external support  That the mere utilisation of the service in connection with business would not meet the test of article 13. The contention that the handing over of research material, processes relating to the league structure and other services performed by the assessee enabled the Board of Control for Cricket in India to proceed independently in the future was unsustainable, since the Department had proceeded on the incorrect assumption that know-how relating to commercial rights exploitation or that pertaining to structuring, organising and management of a sports league had been transferred. No provision of the memorandum of understanding or the services agreement would warrant such an assumption being made or conclusion drawn. Equally fallacious was the submission that by virtue of the services furnished by the assessee, “experience in conducting and organizing a large-scale sports league” was made available to the Board of Control for Cricket in India.  That the assessee was engaged by the Board of Control for Cricket in India principally in view of its expertise, special abilities, experience and capabilities of conceptualising sporting leagues. The assessee was tasked with creating the Indian Premier League based on the special knowledge, skill and experience that it possessed in the curation of sporting leagues. The various obligations that were placed upon the assessee established that all facets of the Indian Premier League and the entire gamut of activities connected with the proposed league were not only to be created by it, the assessee was also tasked with managing and administering all commercial and media rights of the Board of Control for Cricket in India. In terms of clause 4.2 of the services agreement, the assessee was to prepare and execute marketing strategies, management of future tendering processes, craft the league handbook and discharge various other functions enumerated therein. The enumeration of functions in clause 4.2(a) was merely illustrative as that clause used the expression “including, without limitation”. Under clause 4.2(r) the assessee was under an obligation to provide the requisite manpower to carry out activities connected with the league to ensure successful running of the league and the matches which were to be held and establish a fully staffed office at its own cost. The services agreement required the assessee to carry out research each year to ascertain improvements warranted in various areas pertaining to the management and execution of the league and the development of the Board of Control for Cricket in India’s brand framework. The various functions which the assessee discharged was to be aided by drawing upon its expertise and special knowledge in the creation and conduct of leagues of the stature of the Indian Premier League. There was no discernible intent on the part of Board of Control for Cricket in India to absorb or internalise the assessee’s unique skills and knowledge in the curation of sporting leagues. No part of that knowledge or skill stood transferred to the Board of Control for Cricket in India. Merely because research material would have been shared with the Board of Control for Cricket in India or the service rendered by it had been put to use and utilised could not lead to the conclusion that the payer stood enabled or equipped with the special knowledge underlying the technical and consultancy service which was extended.  That the retention to perform the services under the agreement for a period of ten years was yet another indicator of the Board of Control for Cricket in India having not been enabled or made available the special knowledge and skill possessed by the assessee. The contractual arrangement contemplated a continued engagement and ongoing reliance on the assessee’s expertise without any transfer of know-how or skills to the Board of Control for Cricket in India.

That paragraph (6) of article 13 stipulated that where the fees for technical services arose through a permanent establishment which existed and the right, property or contract in respect of the same were effectively connected with such permanent establishment, article 13 would cease to apply and the income would then be taxable in accordance with article 7 or article 15 of the Double Taxation Avoidance Agreement.  That the service permanent establishment was not a separate legal entity which could be called upon to satisfy the test of economic ownership. While Conventions do accord an independent identity upon a permanent establishment, they do so for the purposes of taxation alone. A permanent establishment, need not in all circumstances be a juridical entity as is recognised in law. That though the Indian Premier League in the years 2009 (assessment year 2010-11) and 2014 (assessment year 2015-16) originally were to be held in India, for exceptional reasons, were shifted and held in South Africa and the United Arab Emirates, respectively. The services which were rendered by the assessee in connection with those two events were utilized outside India and availed of for the purposes of earning income from a source outside India. The geographical shift meant that the services rendered by the assessee were utilized outside India and were integral to earning income from sources outside India. The Tribunal had glossed over the significance of this relocation, which had fundamentally altered the context in which the assessee’s services were availed of and had erred in failing to appreciate the significance of the event itself having shifted out of India and the services thus coming to be utilized in South Africa and the United Arab Emirates and being indelibly connected to the earning of income from a source outside India. The Explanation incorporated in section 9 neither erases nor overrides the exception which continues to exist in clause (vii). The exception forming part of clause (vii) existed on the statute book at the time when the Finance Act, 2010 ([2010] 323 ITR (St.) 1) was introduced and clause (vii) was not deleted or restructured. While the Explanation added to section 9 with retrospective effect from June 1, 1976 did not declare that fees for technical services earned by a non-resident would be deemed to accrue or arise in India irrespective of whether it had a place of business or business connection therein or had rendered services in India, the same would not result in fees for technical services paid by a resident for services utilized in connection with a business outside India or for the purposes of earning income from a source outside India liable to tax. The territorial nexus must imbue the issue of taxability.  That the Tribunal had erred in holding that the advice and consultancy services rendered by the assessee enabled the Board of Control for Cricket in India “to absorb and apply the information and advice” without considering the distinction that must be acknowledged to exist between the mere utilisation of technical or consultancy service in aid of business and the transfer, transmission and enablement which must occur in order for the twin conditions of article 13 of the Double Taxation Avoidance Agreement being satisfied. Therefore, the conclusions of the Tribunal on section 9(1)(vii)(b) could not be upheld. In so far as article 13(6) of the Double Taxation Avoidance Agreement and the issue of “effectively connected” was concerned, in view of the findings on fees for technical services, the court desisted from expressing any final opinion and in view of the reservations expressed, the court clarified that this decision need not be construed as an affirmation of the view in law as expressed by the Tribunal.(AY.2010-11 to 2018-19)