Bain & Company Vs D/ACIT (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT), Delhi arose from a final assessment order dated 18 December 2024 passed by the Deputy/Assistant Commissioner of Income Tax (International Tax), Gurgaon under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961. The assessee is a foreign company resident of the United States engaged in consultancy services including strategy, performance improvement, organization enhancement, mergers and acquisitions, and private equity advisory. It also provides support services to its subsidiaries.
The main disputes in the appeal concerned three additions made by the Assessing Officer (AO). First, an addition of ₹86,80,47,511 relating to receipts for management consultancy services provided to its Indian subsidiary. Second, an addition of ₹47,98,96,089 relating to receipts for professional support services provided to the same subsidiary. Third, an addition of ₹57,45,100 received as subscription fees for providing access to the NPS Prism Platform to third parties. The AO, following directions of the Dispute Resolution Panel (DRP), treated consultancy and support service receipts as Fees for Included Services (FIS) under Article 12 of the India–USA Double Taxation Avoidance Agreement (DTAA). The subscription fees were treated as royalty income under Section 9(1)(vi) of the Income-tax Act and Article 12(3) of the DTAA.
