Case Law Details
Buro Happold Limited Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that mere passing off project specific architectural, drawings and designs with measurements does not amount to making available technical knowledge, experience, skill, knowhow or processes. Accordingly, cannot be brought to tax as ‘Fee for Technical Services’.
Facts- The assessee is a company registered in the United Kingdom and was a tax resident of that State. The assessee is an international, integrated engineering and consultancy company. The assessee is engaged in the business of providing structural and MEP (Mechanical, Electrical and Public Healthy) Engineering and consultation services for various buildings and projects in India. During the year under consideration assessee receive various amounts from India.
AO observed that amount of Rs. 15,18,250/- received by the assessee towards consulting engineering services is in the nature of Fee for Technical Services (FTS) and brought to tax the same as per Article 13(2)(a)(ii) of the India UK DTAA in the hands of the assessee.
AO also concluded that payment received under the head ‘cost recharge’ is royalty as per Act and as per India UK DTAA. Therefore, the amount of Rs 5,67,33,937/- received by the assessee under the head ‘Cost Recharge’ was treated by the ld. AO as Royalty u/s 9(1)(vi) of the Act as well as under Article 13 of India UK DTAA.
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