Case Law Details
Gensler Singapore Private Limited Vs JCIT (ITAT Delhi)
ITAT Delhi held that payments received by the assessee qualifies as Fees for Technical Services (FTS) under sub-clause (4) of Article 12 of Indo – Singapore DTAA and hence rightly brought to tax @10%.
Facts- The assessee is a tax resident of Singapore and is in the business of providing design services to customers in the Asia Pacific region. During the assessment year under consideration the assessee has provided the services to its Indian Associated Enterprises – Gensler Design India Pvt. Ltd. This service included designs, technical and consulting services, marketing support services and services related to evaluation of certain project properties. Receipts in lieu of these services have been offered to tax as Fees for Technical Services (FTS) @ 10% in accordance with Article 12 of Indo Singapore DTAA.
In the course of assessment AO noticed that the assessee has received Rs.2,90,89,423/- from Reliance Corporation IT Park Limited (RCITP) and in Form 26AS it is reflected that TDS @ 10% has been deducted by the payer on the said amount. Assessee was asked to explain why the said receipts have not been included in the taxable income. Assessee stated that the income received from RCITP is not taxable as per the Treaty.
On analyzing the work order AO concluded that the said receipts get covered in the scope and ambit of the term ‘fees for technical services’ as laid down in Article 12 of the Treaty. Thus, AO in the draft assessment order passed u/s. 144C of the Act held that the income of Rs.2,70,89,423/- is in the nature of fees for technical services both under the Income Tax Act and the Indo – Singapore DTAA.
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