Law:

Section:

Section 9, read with section 90, of the Income-tax Act, 1961 and article 13 of the Double Taxation Avoidance Convention between India and UK (Fees for technical services) - Income - Deemed to accrue or arise in India - Applicant is an Indian company having network of retail fuel stations in India - SIPCL is group company of applicant which is incorporated in UK and is in business of providing consultancy services to various group companies - Applicant has entered into Cost Contribution Agreement (CCA) with SIPCL for provision of General Business Support Services (BSS) - Though applicant construes General BSS as management support services of advisory nature, it appears from CCA that applicant receives services in form of general finance advice, taxation advice, legal advice, advice on information technology, media advice, assistance in contract and procurement and assistance in marketing - Whether nature of General BSS, viewed as such, is of consultancy services and since while providing General BSS, SIPCL works closely with employees of applicant and supports/advises them, it is clear that General BSS is made available to applicant - Held, yes - Whether on facts payment made by applicant to SIPCL for availing General BSS under CCA would constitute income in hands of SIPCL and is in nature of fees for technical services within meaning of Article 13.4(c) of DTAC between India and UK - Held, yes - Whether, on facts, such payment can be said to be in nature of royalty within meaning of term in Explanation 2 to clause (vi) of section 9(1) and under Article 13 of DTAC - Held, no [In favour of revenue] FACTS The applicant is an Indian company. It has a network of retail fuel stations in India. SIPCL is a group company of assessee incorporated in UK. It is in the business of providing consultancy services to various group companies. The applicant has entered into Cost Contribution Agreement (CCA) with SIPCL for the provision of General Business Support Services (BSS). Construing the General BSS as management support services of advisory nature, the applicant submits that rendering of such services would not make available any technical knowledge, skill, experience,…

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