Assessee filed application under section 197 seeking ‘nil’ withholding tax certificate in respect of cross charges received from its AEs for services rendered by it.Assessing Officer rejected\u00a0 application and held that charges paid to assessee by its AEs were taxable as fees for technical services (FTS) and fees for included services (FIS). On writ the Court held that services rendered by assessee did not make available technical knowledge, experience, skill, know-how, or processes to AEs and\u00a0 service provided did not confer any right in favour of recipient in respect of knowledge, experience, skill or know-how, condition that services ‘make available’ such technical knowledge, know-how, skill, or process so as to fall with sweep of FIS would not be satisfied.On fact\u00a0 thee\u00a0 AEs did not acquire any copyright in software, cross charges paid by them could not be construed as royalties within scope of article 12(3) of India-US DTAA, Accordingly the order rejecting the application was set aside and Assessing Officer was\u00a0 directed to issue necessary certificate or \u2018NIL\u2019 withholding Tax Certificate in respect of cross-cost charges as received by assessee from its AEs.<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 197 : Deduction at source-Certificate for lower rate-Income deemed to accrue or arise in India-Fees for technical services-Royalty-Support services to Indian AEs-Gross charges received-Not taxable as FTS \/FIS-Services did not make available either technical knowledge or involed transfer of copyright-DTAA-India-USA [S.9(1)(vi),9(1)(vii), Art. 12(3), Art. 226]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-59338","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fr4","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59338","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=59338"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59338\/revisions"}],"predecessor-version":[{"id":59339,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59338\/revisions\/59339"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=59338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=59338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=59338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}