Korn Ferry (US) Vs ACIT (ITAT Delhi)
‘Payments recived for providing consultancy services in absence of “make available” is not taxable in the hands of the Assessee under Article 12 of India-USA DTAA
Executive Summary
The Tribunal held that under Article 12 of the India USA DTAA, services can be taxed as Fees for Included Services only if they are technical or consultancy in nature and satisfy the “make available” condition. It observed that merely because the service provider uses technical expertise does not mean that technical knowledge or skill is made available to the service recipient. In the present case, consultancy services relating to organisational strategy, talent, and rewards did not enable the recipients to independently apply any technology in future, and hence the “make available” condition was not fulfilled. Accordingly, following its own decision for the preceding Assessment Year on identical facts, the Tribunal held that the service fees were not taxable in India and allowed the Assessee’s appeal.
Brief Facts of the Case
1. The present appeal has been filed against the order dated 29 September 2023 passed by the Assistant Commissioner of Income Tax, Circle International Taxation, for Assessment Year 2021–22, u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961.
