GE Energy Management Services Inc Vs Asstt. D.I.T (ITAT Delhi)
Summary: The assessee challenged the separate orders of the DRP/CIT(A) for Assessment Years 2008-09 to 2014-15 concerning the taxability of receipts from Power Grid Corporation of India Limited (PGCIL) for offshore maintenance and support services and receipts from North Delhi Power Limited (NDPL) relating to offshore software licences and services. The Tribunal considered the appeals together and proceeded on the facts of Assessment Year 2010-11 in ITA No. 458/DEL/2014. The assessee relied upon section 90(2) of the Income-tax Act and the more beneficial provisions of the India-US DTAA.
In relation to PGCIL, the Tribunal examined the long-term maintenance and support agreement and noted that the services were performed from outside India through remote system monitoring, remote launching, telephonic discussions and internet communications. The Tribunal found that the services did not make available technical knowledge, experience, skills, know-how or processes to PGCIL. The repetitive and ongoing nature of the services under the five-year agreement meant that PGCIL continued to depend upon the assessee for the services. Relying upon the judicial precedents discussed in the order, the Tribunal held that the receipts from PGCIL did not qualify as royalty under Article 12(4)(a) or 12(4)(b) of the India-US DTAA and directed deletion of the addition.
