Tax not payable on IT support service as Fees for Technical service

BMC Software Asia Pacific Pte Ltd. Vs ACIT (International Tax) (ITAT Pune)

Held that receipt of IT support service doesn’t become FTS as assessee did not make available any technical knowhow, experience or skill to its customers. The same is not chargeable to tax

Facts-

AO noted that the assessee earned an income of Rs.109,01,25,420/- from the sale of Software licenses and support services in relation thereto, which was not offered for taxation on the ground that the first item was towards the sale of software licenses and not the transfer of copyright; and the second was for Support Services which did not make available any technical know-how to the customer. The AO passed the impugned order including IT Support service charges of Rs.42.42 crore in the total income. Being aggrieved, the assessee preferred the present appeal.

Conclusion-

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