M/S. EXXON MOBILE COMPANY PVT LTD., MUMBAI-400022 V. ASST. COMM. OF INCOME TAX-6(1)(1), Mumbai

CO 113/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2646 (ITAT-MUMBAI)
• Duration Of Justice: 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Next Hearing Date: 21-09-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 15-09-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Set aside
• Section: 2; 234B; 40(a)(ia); 195; 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 1283/MUM/2022 Assessment Year: 2011-12 Deputy Commissioner of Income Tax, Office of the Asstt. Commissioner of Income Tax 6(1)(1), Room No. 504, Aayakar Bhavan, M.K. Road, Churchgate, Mumbai-400020. Vs. M/s Exxon Mobile Company Pvt. Ltd., Kalpataru Point, Plot No. 107, Road No. 8, Sion (East), Mumbai-400020. PAN No. AAACE 3157 H Appellant Respondent C.O. No. 113/MUM/2022 (ITA No. 1283/MUM/2022) Assessment Year: 2011-12 M/s Exxon Mobile Company Pvt. Ltd., Kalpataru Point, Plot No. 107, Road No. 8, Sion (East), Mumbai-400020. Vs. Deputy Commissioner of Income Tax, Office of the Asstt. Commissioner of Income Tax 6(1)(1), Room No. 504, Aayakar Bhavan, M.K. Road, Churchgate, Mumbai-400020. PAN No. AAACE 3157 H Appellant Respondent Revenue by : Ms. Samruddhi Hande, DR Assessee by : Mr. Paras Savla, Adv. a/w Mr. Dhiraj Jain Date of Hearing : 22/09/2022 Date of pronouncement : 28/09/2022 PER OM PRAKASH KANT, AM This appeal by the Revenue and cross assessee are directed against the order dated 24.03.2022 passed by the Ld. Commissioner of Income ‘the Ld. CIT(A)’], for assessment year 2011 2. The grounds raised by the Revenue are reproduced as under: i. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is disallowance of Rs.3,72,63,413/ Act 1961 without appreciating that the services rendered by EMCAP were crucial in carrying out the business activity of the assessee and while rendering such services EMCAP expertise to the assessee. ii. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in deleting the disallowance of Rs. 3,72,63,413/ Act 1961 wit the assessee is in the nature of fees for technical services as defined in Explanation 2 to sec 9(1)(vii) of the Act.' M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue and cross-objection by the assessee are directed against the order dated 24.03.2022 passed by Commissioner of Income-tax (Appeals)-56, Mumbai [in short ‘the Ld. CIT(A)’], for assessment year 2011-12. The grounds raised by the Revenue are reproduced as under: Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in deleting the disallowance of Rs.3,72,63,413/- u/s. 40(a)(ia) of the IT Act 1961 without appreciating that the services rendered by EMCAP were crucial in carrying out the business activity of the assessee and while rendering such services EMCAP had made available the technical skill and expertise to the assessee. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in deleting the disallowance of Rs. 3,72,63,413/ -u/S. 40(a)(ia) of the iT Act 1961 without appreciating that the payment made by the assessee is in the nature of fees for technical services as defined in Explanation 2 to sec 9(1)(vii) of the Act.' M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 2 objection by the assessee are directed against the order dated 24.03.2022 passed by 56, Mumbai [in short The grounds raised by the Revenue are reproduced as under: Whether on the facts and in the circumstances of the case justified in deleting the u/s. 40(a)(ia) of the IT Act 1961 without appreciating that the services rendered by EMCAP were crucial in carrying out the business activity of the assessee and while rendering such services had made available the technical skill and "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in deleting the u/S. 40(a)(ia) of the iT hout appreciating that the payment made by the assessee is in the nature of fees for technical services as defined in Explanation 2 to sec 9(1)(vii) of the Act.' iii. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justifi that assessee was duty bound to deduct tax at source while making payment u/s. 195 of the IT Act 1961 to EMCAP as EMCAP earned fees by virtue of its business connection in India and is liable to be taxed in India" iv. "Whether on the fac case and in law the Ld. CIT(A) is justified in not appreciating that the interest u/s 234B is calculated on the basis of assessed total income v. The Appellant prays that the order of the CIT (Appeals) on the above grounds restored. 2.1 The cross-objections raised by the assessee are reproduced as under: 1. The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that payment of global support services charges to EMC expenses incurred and it does not have any profit element or mark up and therefore the same was not liable to tax. 2. The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that global support servi charges are not in the nature of 'fees for technical services' as defined in Explanation 2 to section 9(1)(vii) of the Income Tax Act, 1961 (the Act). M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in not appreciating that assessee was duty bound to deduct tax at source while making payment u/s. 195 of the IT Act 1961 to EMCAP as EMCAP earned fees by virtue of its business connection in India and is liable to be taxed in India" "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in not appreciating that the interest u/s 234B is calculated on the basis of assessed total income The Appellant prays that the order of the CIT (Appeals) on the above grounds be set aside and that of the AO be restored. objections raised by the assessee are reproduced as The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that payment of global support services charges to EMCAP was towards reimbursement of expenses incurred and it does not have any profit element or mark up and therefore the same was not liable to tax. The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that global support servi charges are not in the nature of 'fees for technical services' as defined in Explanation 2 to section 9(1)(vii) of the Income Tax Act, 1961 (the Act). M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 3 Whether on the facts and in the circumstances of the case ed in not appreciating that assessee was duty bound to deduct tax at source while making payment u/s. 195 of the IT Act 1961 to EMCAP as EMCAP earned fees by virtue of its business connection in India and is liable to be taxed in India" ts and in the circumstances of the case and in law the Ld. CIT(A) is justified in not appreciating that the interest u/s 234B is calculated on The Appellant prays that the order of the CIT (Appeals) be set aside and that of the AO be objections raised by the assessee are reproduced as The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that payment of global support AP was towards reimbursement of expenses incurred and it does not have any profit element or mark up and therefore the same was not liable to tax. The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that global support service charges are not in the nature of 'fees for technical services' as defined in Explanation 2 to section 9(1)(vii) of the Income 3. The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that global suppor charges are paid for earning income from source outside India and therefore covered by t 9(1)(vii)(b) of the Act and therefore not chargeable to tax. 4. Each one of the above grounds of appeal is without prejudice to the other. 3. Briefly stated, facts of the case are that the assessee in the business of market development, dissemination of product information of specialty chemicals and polymers research and development activities. The assessee filed original re on 28.11.2011 declaring total income of further revised on 11.12.2012 declaring total income of ₹60,68,47,823/-. The assessment was completed by the Assessing Officer on 25.05.2015 after taking into consideration re Transfer Pricing Officer for determination of arm’s length price of international transaction carried out by the assessee. One of the addition made by the Assessing Officer include disallowance of ₹3,72,63,413/- u/s 40(a)(ia) of the Income M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 The learned Commissioner of Income tax (Appeals) ought to have appreciated and held that global support service charges are paid for earning income from source outside India and therefore covered by the exception to section )(b) of the Act and therefore not chargeable to tax. Each one of the above grounds of appeal is without prejudice other. Briefly stated, facts of the case are that the assessee in the business of market development, dissemination of product information of specialty chemicals and polymers research and development activities. The assessee filed original re on 28.11.2011 declaring total income of ₹48,21,69,765/ further revised on 11.12.2012 declaring total income of . The assessment was completed by the Assessing Officer on 25.05.2015 after taking into consideration re Transfer Pricing Officer for determination of arm’s length price of international transaction carried out by the assessee. One of the addition made by the Assessing Officer include disallowance of u/s 40(a)(ia) of the Income-tax Act, M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 4 The learned Commissioner of Income tax (Appeals) ought to t service charges are paid for earning income from source outside he exception to section )(b) of the Act and therefore not chargeable to tax. Each one of the above grounds of appeal is without prejudice Briefly stated, facts of the case are that the assessee is engaged in the business of market development, dissemination of product information of specialty chemicals and polymers research and development activities. The assessee filed original return of income 48,21,69,765/- which was further revised on 11.12.2012 declaring total income of . The assessment was completed by the Assessing Officer on 25.05.2015 after taking into consideration report of Transfer Pricing Officer for determination of arm’s length price of international transaction carried out by the assessee. One of the addition made by the Assessing Officer include disallowance of tax Act, 1961 (in short ‘the Act’) for non-deduction tax at source on global support service fee paid. 4. Before us, the Ld. Departmental Representative (DR) fairly accepted thus issue-in order of the Tribunal for ass year 2010-11. 5. We have heard rival submissions of the parties on the issue dispute and perused the relevant material on record. The Revenue in its ground is agitated by way of action of the Ld. CIT(A) for allowing the payment in dispute even without deduction of tax at source by the assessee and not holding services. We find that the Ld. CIT(A) in para 7.3 of the impugned order has followed the decision of the Tribunal in the case of the assessee for assessment year 2007 said decision of Tribunal has been followed in subsequent assessment years 2008 M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 deduction tax at source on global support service Before us, the Ld. Departmental Representative (DR) fairly in-dispute is covered against the Revenue by the order of the Tribunal for assessment year 2007-08 to assessment We have heard rival submissions of the parties on the issue dispute and perused the relevant material on record. The Revenue in its ground is agitated by way of action of the Ld. CIT(A) for he payment in dispute even without deduction of tax at source by the assessee and not holding the same as fee for technical We find that the Ld. CIT(A) in para 7.3 of the impugned order has followed the decision of the Tribunal in the case of the assessee for assessment year 2007-08 (ITA No. 6708/M/2011). The said decision of Tribunal has been followed in subsequent assessment years 2008-09 to 2010-11. The Tribunal in AY 2010 M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 5 deduction tax at source on global support service Before us, the Ld. Departmental Representative (DR) fairly dispute is covered against the Revenue by the 08 to assessment We have heard rival submissions of the parties on the issue-in- dispute and perused the relevant material on record. The Revenue in its ground is agitated by way of action of the Ld. CIT(A) for he payment in dispute even without deduction of tax at as fee for technical We find that the Ld. CIT(A) in para 7.3 of the impugned order has followed the decision of the Tribunal in the case of the 08 (ITA No. 6708/M/2011). The said decision of Tribunal has been followed in subsequent 11. The Tribunal in AY 2010-11 has also followed its finding in AY 2008 ITAT in ITA No. 4520/Mum/2017 for AY 2010 under: “19. Considered the rival submission and material placed on record. We notice from the records that the identical grounds raised in the present appeal in respect of disallowance made u/ Act, have already been decided by the Coordinate Bench of ITAT in ITA No. 4521/Mum/2017 for AY 2008 merits. For the sake of clarity, which is reproduced below: We have heard the rival submissions and peruse materials on record. We find that similar disallowance made by the AO, then confirmed by the Ld. CIT(A) has been deleted by the Tribunal vide order dated 21.02.2018 for Ay 2007 that : “48. We have heard rival contentions an record. We have also applied our mind to the decisions relied upon. It is evident, while disallowing the amount in dispute under section 40(a)(i) of the Act, the Assessing Officer has held that the payment made by the assessee to EMCA in the nature of fees for technical service as defined under Explanation-2 to section 9(1)(vii) of the Act. It is also relevant to note, under Article technical services, thoug Singapore, however, it can also be taxed in India under certain circumstances. Applying the said provision, it is necessary to M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 has also followed its finding in AY 2008-09. The relevant para of the ITAT in ITA No. 4520/Mum/2017 for AY 2010-11 is reproduced as 19. Considered the rival submission and material placed on record. We notice from the records that the identical grounds raised in the present appeal in respect of disallowance made u/s 40(a)(ia) of the Act, have already been decided by the Coordinate Bench of ITAT in ITA No. 4521/Mum/2017 for AY 2008-09 in assessee’s own case on merits. For the sake of clarity, which is reproduced below:- We have heard the rival submissions and perused the relevant materials on record. We find that similar disallowance made by the AO, then confirmed by the Ld. CIT(A) has been deleted by the Tribunal vide order dated 21.02.2018 for Ay 2007-08, by observing “48. We have heard rival contentions and perused material on record. We have also applied our mind to the decisions relied upon. It is evident, while disallowing the amount in dispute under section 40(a)(i) of the Act, the Assessing Officer has held that the payment made by the assessee to EMCAP towards Global support services is in the nature of fees for technical service as defined under 2 to section 9(1)(vii) of the Act. It is also relevant to note, under Article-12 of India Singapore tax treaty, fees for technical services, though, is taxable in the hands of the recipient in Singapore, however, it can also be taxed in India under certain circumstances. Applying the said provision, it is necessary to M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 6 The relevant para of the 11 is reproduced as 19. Considered the rival submission and material placed on record. We notice from the records that the identical grounds raised in the s 40(a)(ia) of the Act, have already been decided by the Coordinate Bench of ITAT in 09 in assessee’s own case on - d the relevant materials on record. We find that similar disallowance made by the AO, then confirmed by the Ld. CIT(A) has been deleted by the 08, by observing d perused material on record. We have also applied our mind to the decisions relied upon. It is evident, while disallowing the amount in dispute under section 40(a)(i) of the Act, the Assessing Officer has held that the payment P towards Global support services is in the nature of fees for technical service as defined under 2 to section 9(1)(vii) of the Act. It is also relevant to 12 of India Singapore tax treaty, fees for h, is taxable in the hands of the recipient in Singapore, however, it can also be taxed in India under certain circumstances. Applying the said provision, it is necessary to determine whether the payment made can at all be termed as fee for technical servi Singapore Tax Treaty. In our considered opinion, we have to address this issue at the very outset. Article Singapore tax treaty defines fee for technical services as under: “12.4 the term “fees for means payments of any kind to any person in consideration of services of a managerial, technical or consultancy nature (including the provision of such services through technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or (b) make available technical knowledge, experience, skill, know how or processes, whic to apply the technology contained therein; or (c) consist of the development and transfer of a technical plan or technical design, but excludes any service that does not enable the person acquiring the service t therein.” 49. The Assessing Officer has treated the payment made as fees for technical services on the reasoning that under the agreement EMCAP has made available managerial and technical services to the assessee. The expr Article 12(4)(b) of the India of such service is able to apply or make use of the technical knowledge, knowhow, etc., by himself in his business or for his own benefit and without recourse to the service provider in future and M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 determine whether the payment made can at all be termed as fee for technical services as defined under Artic1e—12 of India Singapore Tax Treaty. In our considered opinion, we have to address this issue at the very outset. Article—12(4) of India Singapore tax treaty defines fee for technical services as under: “12.4 the term “fees for technical “services” as used in this Article means payments of any kind to any person in consideration of services of a managerial, technical or consultancy nature (including the provision of such services through technical or other personnel) ices: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or (b) make available technical knowledge, experience, skill, know how or processes, which enables the person acquiring the services to apply the technology contained therein; or (c) consist of the development and transfer of a technical plan or technical design, but excludes any service that does not enable the person acquiring the service to apply the technology contained 49. The Assessing Officer has treated the payment made as fees for technical services on the reasoning that under the agreement EMCAP has made available managerial and technical services to the assessee. The expression “make available" which also appears in Article 12(4)(b) of the India-US tax treaty would mean the recipient of such service is able to apply or make use of the technical knowledge, knowhow, etc., by himself in his business or for his own without recourse to the service provider in future and M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 7 determine whether the payment made can at all be termed as fee 12 of India Singapore Tax Treaty. In our considered opinion, we have to 12(4) of India Singapore tax treaty defines fee for technical services as under:— technical “services” as used in this Article means payments of any kind to any person in consideration of services of a managerial, technical or consultancy nature (including the provision of such services through technical or other personnel) ices: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a (b) make available technical knowledge, experience, skill, know— h enables the person acquiring the services (c) consist of the development and transfer of a technical plan or technical design, but excludes any service that does not enable the o apply the technology contained 49. The Assessing Officer has treated the payment made as fees for technical services on the reasoning that under the agreement EMCAP has made available managerial and technical services to the ession “make available" which also appears in US tax treaty would mean the recipient of such service is able to apply or make use of the technical knowledge, knowhow, etc., by himself in his business or for his own without recourse to the service provider in future and for this purpose a transaction of the technical knowledge, experience, skills, etc., from the service provider to the service recipient is necessary. Some sort of durability or permanency of the result of the rendering of services is envisaged which will remain at the disposal of the service recipient. In other words, the technical knowledge, experience, skill, etc., must remain with the service recipient even after the end. In contrast to Article Article— 12(4)(b) of India specific by providing that technical knowledge, experience, skill, knowhow or process, would not amount to fees for unless it enables the person acquiring the service to apply the technology therein. A perusal of the agreement between the assessee and EMCAP makes it clear that as per the terms of the agreement EMCAP would provide management consulting functional advice, administrative, technical, professional and other support services to the assessee either itself or through any affiliate or through third parties. However, there is nothing in the agreement to conclude that in the course of such provi service, EMCAP has made available any technical knowledge experience, skill, knowhow, or process which enables the assessee to apply the technology contained therein on its own without the aid of EMCAP. The Hon'ble Karnataka High Court while explai true import of expression “make available" in case of De Beers India Mineral Pvt. Ltd. (supra) has observed as under: “What is the meaning of "make available". The technical or consultancy service rendered should be of such a nature that it “makes available" to the recipient technical knowledge, know M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 for this purpose a transaction of the technical knowledge, experience, skills, etc., from the service provider to the service recipient is necessary. Some sort of durability or permanency of the t of the rendering of services is envisaged which will remain at the disposal of the service recipient. In other words, the technical knowledge, experience, skill, etc., must remain with the service recipient even after the rendering of the services has co end. In contrast to Article—12(4)(b) of the India—U.S. tax treaty, 12(4)(b) of India—Singapore tax treaty has made it more specific by providing that technical knowledge, experience, skill, knowhow or process, would not amount to fees for technical service unless it enables the person acquiring the service to apply the technology therein. A perusal of the agreement between the assessee and EMCAP makes it clear that as per the terms of the agreement EMCAP would provide management consulting functional advice, administrative, technical, professional and other support services to the assessee either itself or through any affiliate or through third parties. However, there is nothing in the agreement to conclude that in the course of such provi service, EMCAP has made available any technical knowledge experience, skill, knowhow, or process which enables the assessee to apply the technology contained therein on its own without the aid of EMCAP. The Hon'ble Karnataka High Court while explai true import of expression “make available" in case of De Beers India Mineral Pvt. Ltd. (supra) has observed as under:- “What is the meaning of "make available". The technical or consultancy service rendered should be of such a nature that it “makes available" to the recipient technical knowledge, know M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 8 for this purpose a transaction of the technical knowledge, experience, skills, etc., from the service provider to the service recipient is necessary. Some sort of durability or permanency of the t of the rendering of services is envisaged which will remain at the disposal of the service recipient. In other words, the technical knowledge, experience, skill, etc., must remain with the service rendering of the services has come to an U.S. tax treaty, Singapore tax treaty has made it more specific by providing that technical knowledge, experience, skill, technical service unless it enables the person acquiring the service to apply the technology therein. A perusal of the agreement between the assessee and EMCAP makes it clear that as per the terms of the agreement EMCAP would provide management consulting, functional advice, administrative, technical, professional and other support services to the assessee either itself or through any affiliate or through third parties. However, there is nothing in the agreement to conclude that in the course of such provision of service, EMCAP has made available any technical knowledge experience, skill, knowhow, or process which enables the assessee to apply the technology contained therein on its own without the aid of EMCAP. The Hon'ble Karnataka High Court while explaining the true import of expression “make available" in case of De Beers India “What is the meaning of "make available". The technical or consultancy service rendered should be of such a nature that it “makes available" to the recipient technical knowledge, know-how and the like. transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words, to fit into the terminology "making available", the technical knowledge, skill, etc., must remain with the person receiving the services even after the particular contract comes to an end. lt is not enough that the services offered are the product of intense technological effort and a lot of techni knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should he imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future with depending upon the provider. Technology will be considered ”made available‟ when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does no technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available, in other words consideration would be regarded as "fees for services” only if the twin test of rendering services and making technical knowledge available at the same time is satisfied.” A careful analysis of the observations of the High Court, makes it clear that “make available” not only would mean that recipient of the service is in a position to derive an enduring benefit out of utilisation of the knowledge or knowhow on his own in fut M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 The service should be aimed at and result in ing technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge how on his own in future without the aid of the service provider. In other words, to fit into the terminology "making le", the technical knowledge, skill, etc., must remain with the person receiving the services even after the particular contract comes to an end. lt is not enough that the services offered are the product of intense technological effort and a lot of techni knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should he imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future with depending upon the provider. Technology will be considered ”made ‟ when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does not mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available, in other words, payment of consideration would be regarded as "fees for technical/included services” only if the twin test of rendering services and making technical knowledge available at the same time is satisfied.” A careful analysis of the observations of the High Court, makes it clear that “make available” not only would mean that recipient of the service is in a position to derive an enduring benefit out of utilisation of the knowledge or knowhow on his own in fut M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 9 The service should be aimed at and result in ing technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge how on his own in future without the aid of the service provider. In other words, to fit into the terminology "making le", the technical knowledge, skill, etc., must remain with the person receiving the services even after the particular contract comes to an end. lt is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should he imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered ”made ‟ when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may t mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered , payment of technical/included services” only if the twin test of rendering services and making technical knowledge available at the same time is satisfied.” A careful analysis of the observations of the High Court, makes it clear that “make available” not only would mean that recipient of the service is in a position to derive an enduring benefit out of utilisation of the knowledge or knowhow on his own in future without the aid of the service provider but such technical knowledge, skill, knowhow, etc., must remain with the recipient even after the contract comes to an end. The Court has observed, the technology will be considered to have been made available wh the person acquiring the service enable him to apply the technology. Further, the Court went on to hold that the payment can be considered as fees for technical services only if the twin test of rendering service and making technical knowledge available same time is satisfied. If we apply the aforesaid tests laid down by the Hon'ble Karnataka High Court to the facts of the present case it becomes clear that it has not been established on record that while rendering the services, EMCAP has made ava knowledge, knowhow, skill, etc., to the assessee in a manner to enable him to apply them independently or on its own. Therefore, the payment made by the assessee cannot be considered as fees for technical services as Singapore tax treaty and for this reason also we do not have to examine taxability of the same under section 9(1)(vii) of the Act. Moreover, it is a fact on record that the payment of global support service fee was made under the agre from the year 2003. It is a matter of record that in the preceding assessment years though the assessee has paid global support service fees to EMCAP without deducting tax at source, no disallowance under section 40(a)(i) was ever there being no difference in facts in the impugned assessment year, considering that the payment was made under the same contract, even, applying the rule of consistency, no disallowance under section 40(a)(i) can be made in the impugned M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 without the aid of the service provider but such technical knowledge, skill, knowhow, etc., must remain with the recipient even after the contract comes to an end. The Court has observed, the technology will be considered to have been made available wh the person acquiring the service enable him to apply the technology. Further, the Court went on to hold that the payment can be considered as fees for technical services only if the twin test of rendering service and making technical knowledge available same time is satisfied. If we apply the aforesaid tests laid down by the Hon'ble Karnataka High Court to the facts of the present case it becomes clear that it has not been established on record that while rendering the services, EMCAP has made available technical knowledge, knowhow, skill, etc., to the assessee in a manner to enable him to apply them independently or on its own. Therefore, the payment made by the assessee cannot be considered as fees for technical services as defined under Article 12(4)(b) of the India Singapore tax treaty and for this reason also we do not have to examine taxability of the same under section 9(1)(vii) of the Act. Moreover, it is a fact on record that the payment of global support service fee was made under the agreement which has continued from the year 2003. It is a matter of record that in the preceding assessment years though the assessee has paid global support service fees to EMCAP without deducting tax at source, no disallowance under section 40(a)(i) was ever made. Therefore, there being no difference in facts in the impugned assessment year, considering that the payment was made under the same contract, even, applying the rule of consistency, no disallowance under section 40(a)(i) can be made in the impugned assessment year. M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 10 without the aid of the service provider but such technical knowledge, skill, knowhow, etc., must remain with the recipient even after the contract comes to an end. The Court has observed, the technology will be considered to have been made available when the person acquiring the service enable him to apply the technology. Further, the Court went on to hold that the payment can be considered as fees for technical services only if the twin test of rendering service and making technical knowledge available at the same time is satisfied. If we apply the aforesaid tests laid down by the Hon'ble Karnataka High Court to the facts of the present case it becomes clear that it has not been established on record that while ilable technical knowledge, knowhow, skill, etc., to the assessee in a manner to enable him to apply them independently or on its own. Therefore, the payment made by the assessee cannot be considered as fees for 12(4)(b) of the India- Singapore tax treaty and for this reason also we do not have to examine taxability of the same under section 9(1)(vii) of the Act. Moreover, it is a fact on record that the payment of global support ement which has continued from the year 2003. It is a matter of record that in the preceding assessment years though the assessee has paid global support service fees to EMCAP without deducting tax at source, no made. Therefore, there being no difference in facts in the impugned assessment year, considering that the payment was made under the same contract, even, applying the rule of consistency, no disallowance under assessment year. Accordingly, we delete the disallowance made by the Assessing Officer. These grounds are allowed.” 9.1 For AY 2008 while deciding similar addition made by the AO u/s 40(a)(i) of the Act Facts being identical, we follow the above order of the Co ordinate Bench in appellant 2008-09 and delete the addition of Rs.1,85,29,377/ u/s 40(a)(i) of the Act 20. Therefore, respectfully following the above d Coordinate Bench in assessee’s own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Therefore, we delete the disallowance made by AO and confirmed by Ld. CIT(A) u/s 40(a)(ia) of t Accordingly, the grounds raised by the assessee are allowed. 5.1 Since, the Ld. CIT(A) has followed binding pr issue-in-dispute, therefore, we do not find any error in the order of the Ld. CIT(A) on the issue same. The Ground No. 1 to 3 raised by the Revenue are accordingly dismissed. 5.2 The Ground No. 4 is consequential and therefore same is also dismissed. M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 Accordingly, we delete the disallowance made by the Assessing Officer. These grounds are allowed.” 9.1 For AY 2008-09, the Tribunal has followed the above order while deciding similar addition made by the AO u/s 40(a)(i) of the being identical, we follow the above order of the Co ordinate Bench in appellant‟s own case for AY 2007- 08 and AY 09 and delete the addition of Rs.1,85,29,377/- made by the AO u/s 40(a)(i) of the Act. 20. Therefore, respectfully following the above decision of Coordinate Bench in assessee’s own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Therefore, we delete the disallowance made by AO and confirmed by Ld. CIT(A) u/s 40(a)(ia) of t Accordingly, the grounds raised by the assessee are allowed. Since, the Ld. CIT(A) has followed binding pr therefore, we do not find any error in the order of the Ld. CIT(A) on the issue-in-dispute. Accordingly, same. The Ground No. 1 to 3 raised by the Revenue are accordingly The Ground No. 4 is consequential and therefore same is also M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 11 Accordingly, we delete the disallowance made by the Assessing 09, the Tribunal has followed the above order while deciding similar addition made by the AO u/s 40(a)(i) of the being identical, we follow the above order of the Co- 08 and AY made by the AO ecision of Coordinate Bench in assessee’s own case which is applicable mutatis mutandis in the present case, we are inclined to accept the submission of Ld. AR. Therefore, we delete the disallowance made by AO and confirmed by Ld. CIT(A) u/s 40(a)(ia) of the Act. Accordingly, the grounds raised by the assessee are allowed.” Since, the Ld. CIT(A) has followed binding precedent on the therefore, we do not find any error in the order of dispute. Accordingly, we uphold the same. The Ground No. 1 to 3 raised by the Revenue are accordingly The Ground No. 4 is consequential and therefore same is also 5.3 The ground No. dismissed as infructu 6. As far as the cross considered, the Ld. Counsel of the been raised as alternative remedy the appeal by the Revenue, therefore, the cross the assessee are adjudicating upon same. The cross dismissed. 7. In the result, both the appeal of the Revenue and cross objection of the assessee are dismissed. Order pronounced in the open Court in Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated:28/09/2022 Rahul Sharma, Sr. P.S. M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 The ground No. 5 and 6 are general in nature and accordingly dismissed as infructuous. As far as the cross-objection raised by the assessee are considered, the Ld. Counsel of the assessee submitted that same alternative remedy. Since we have already the appeal by the Revenue, therefore, the cross-objecti are rendered infructuous, hence, we are not upon same. The cross-objections are accordingly In the result, both the appeal of the Revenue and cross objection of the assessee are dismissed. ounced in the open Court in 28/09 Sd/- KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 12 and 6 are general in nature and accordingly d by the assessee are assessee submitted that same had already dismissed objection raised by hence, we are not objections are accordingly In the result, both the appeal of the Revenue and cross- /09/2022. - OM PRAKASH KANT) MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s Exxon Mobile ITA No. 1283 & CO No. 113 of 2022 Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai M/s Exxon Mobile Compay ITA No. 1283 & CO No. 113 of 2022 13 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai