Case Law Details
Russell Reynolds Associates Inc. Vs DCIT (International Taxation) (ITAT Delhi)
ITAT Delhi held that both support services and reimbursement of expenses are not in nature of Fees for Included Services (FIS) under India – USA DTAA and hence not taxable in India.
Facts-
The assessee, a non-resident corporate entity, offered the royalty income received from its Indian subsidiary under Licensing Agreement towards the use of Intellectual Property Rights (IPR). However, the Company did not offer the amount received towards support services and reimbursement of expenses pleadings that they are not taxable in India.
AO completed the assessment for the impugned assessment years by holding that, both, the amounts received towards support services under the Services Agreement and reimbursement of expenses under Cost Reimbursement Agreement are in the nature of Fees for Included Services (FIS) under Article 12(4)(b) of the India – USA Double Taxation Avoidance Agreement (DTAA). While coming to such a conclusion, the Assessing Officer observed that such services meet the conditions of making available of technical knowledge, experience, skill, know-how etc.
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