The assessee made payments to its non-resident group company for general business support services under a cost contribution arrangement. The arrangement was that the non-resident company managed its group entities, either directly or through own employees or through its third party affiliates or vendors. The costs incurred were then allocated to the entities on a cost to cost basis. On an application for an advance ruling made by the assessee under section 245Q of the Income-tax Act, 1961, the Authority for Advance Rulings ruled that while providing general business support services, the non-resident entity worked closely with the employees of the assessee and supported and advised them, that the assessee was able to use the know-how or intellectual property generated from the general business support services independent of the service provider and hence the services listed under the agreement were made available to the assessee, that the payments made by the assessee to the non-resident company for the general business support services under the cost contribution arrangement were in the nature of fees for “technical services” within the meaning of article 13(4)(c) of the Double Taxation Avoidance Agreement between India and the United Kingdom, and hence, constituted income in the hands of the non-resident entity. The Authority ruled that the assessee was under an obligation to deduct tax at source under section 195 on such payments. On a writ petition, allowing the petition, the Court held that  the list of services availed of by the assessee related to managerial services not involving anything of a technical nature. The Authority for Advance Rulings had discussed the services appearing in the cost contribution arrangement and had concluded that these activities in a retail business were at the core of retail marketing and hence the advice tendered in taking a decision of commercial nature was a consultancy service. The Authority for Advance Rulings had considered the definition of the word “consultancy” as defined in the dictionary and had observed that a consultant was a person who gives professional advice or services in a specialized field, but had failed to appreciate that the word “consultancy” appearing in the article of the Double Taxation Avoidance Agreement was to be interpreted in the context of consultancy which makes available technical knowledge and not of managerial nature. Therefore, the services availed of by the assessee were not technical services and article 13 was wholly inapplicable in the facts and circumstances. That any service was construable as technical but the true import of the service actually rendered had to be seen and the determination must be made in this context. There was no such discussion in the order of the Authority for Advance Rulings2 and the finding was based on a generic reference to the meaning of the word “consultancy” as given in the dictionary. The Authority for Advance Rulings had proceeded on conjectures and surmises to render the finding that the list of services mentioned in the cost contribution arrangement was not an exhaustive list and might have included other technical services. That the Authority for Advance Rulings had interpreted the requirements to be satisfied for “make available” based on its own general notion of the term without appreciating the applicable law on the subject and had reached an erroneous conclusion that the services availed of were technical services. Even if it was fees for technical or consultancy services, it could be only where fees were paid in consideration for making available technical knowledge and experience. Therefore, the view of the Authority for Advance Rulings ^[1] that the non-resident entity had worked closely and advised the employees of the assessee and hence made available the services was not correct and suffered from the fallacy since the cost contribution arrangement continued to operate till date. If the view of Authority for Advance Rulings was correct then the contract would have concluded as once the services and the know-how and skill were transferred to the assessee, the need of continuing to render such services must have ended. The Authority for Advance Rulings had not considered the issue relating to the “permanent establishment” of the non-resident entity and there was no determination on the same though it was not a subject of reference before it. The order of the Authority for Advance Rulings suffered from legal infirmity and was quashed and set aside. However, the Department was at liberty to take necessary action as available to it in law including as to whether the subject would be covered under article 7 of the Double Taxation Avoidance Agreement and if such proceedings were taken, the time taken in the present proceedings would stand excluded for the purpose of limitation.