Tech Data (Singapore) Pte. Limited Vs DCIT (ITAT Mumbai)
The appeal was filed by the assessee against the final assessment order dated 16.01.2025 passed under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961 for Assessment Year 2022-23 pursuant to the directions of the Dispute Resolution Panel (DRP). At the outset, the assessee submitted that Ground No. 1 was covered in its favour by earlier Tribunal decisions and that adjudication of this ground would render the remaining grounds, including the additional legal ground, academic. The Departmental Representative agreed with this submission.
The dispute related to the taxability of ₹42,16,596 received by the assessee as fees for management and business support services. The Assessing Officer treated the amount as Fees for Technical Services (FTS) under Section 9(1)(vii) of the Act and Article 12(4) of the India–Singapore Double Taxation Avoidance Agreement (DTAA). The assessee, a non-resident company incorporated and tax resident in Singapore, had entered into an agreement with its Indian subsidiary, Tech Data Advanced Private Limited, for providing management and business support services. It treated the receipts as business income and, in the absence of a permanent establishment in India, did not offer them to tax.
During assessment, the Assessing Officer held that the services rendered were managerial, technical or consultancy services and therefore constituted FTS under Article 12(4) of the DTAA. The Assessing Officer further held that the “make available” condition under Article 12(4)(b) was not applicable to managerial and consultancy services as they did not involve transfer of technology or know-how. On this basis, the receipts were proposed to be taxed as FTS in the draft assessment order. The DRP endorsed the Assessing Officer’s view.
