Case Law Details
Service Now Nederland BV Vs ACIT (ITAT Delhi)
ITAT Delhi held that subscription, professional and training services rendered by the assessee do not fall within the definition of FTS under India-Netherland DTAA and, therefore, cannot be taxed in India.
Facts- The case of the assessee was selected for scrutiny assessment. AO observed that assessee had claimed INR 171,92,37,658/- as exempt from taxation under Article 12 of India-Netherlands DTAA. Rejecting the claim of the assessee, the AO taxed INR 171,92,37,658/- as FTS under DTAA.
The assessee filed objections against the action of the AO before the learned DRP. Learned DRP considered the objections and held that there was no reason to deviate from the finding of the learned DRP for A.Y. 2019-20, whereby the learned DRP had upheld that the receipts from subscription payments training and professional fees were taxable in India as FTS. However, in respect of the credit of taxes the AO was directed to verify the factual submissions of the assessee and grant credit as per law. Thereafter the AO passed the impugned order u/s 143(3) read with section 144C(13) vide order dated 29.05.2023.
Conclusion- Held that the assessee had merely granted only access to software and there is no transfer of technology by the assessee. Hence we have no hesitation to hold that the services rendered by the assessee does not fall within the definition of FTS as per the Treaty.
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