DCIT 1(3), MUMBAI V. VSNL BROADBAND LTD ( NOW MERGED WITH TATA COMM. LTD), MUMBAI

ITA 1591/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92293 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 02-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Keywords: Double taxation relief; Deemed to accrue or arise in india
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 DCIT - 1(3) R. NO. 540 5 TH FLOOR, AAYAKAR BAHVAN M.K. ROAD, MUMBAI 400 020 VS. M/S. VSNL BROADBAND LTD. (NOW MERGED WITH TATA COMMUNICATIONS LTD.) 6 TH FLOOR, B WING, PLOT NO. C- 21 & C-36, G BLOCK BANDRA KURLA COMPLEX, MUMBAI 400 098 PAN:AABCT 9945 R (APPELLANT) (RESPON DE NT) ASSESSEE BY : SHRI DHANESH BAFNA REVENUE BY : SHRI S. D. SRIVASTAVA DATE OF HEARING : 07.04.2015 DATE OF PRONOUNCEMENT : 07 .04.2015 O R D E R PER AMIT SHUKLA, JM: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST ORDER DATED 30.10.2012 PASSED BY THE LD.CIT(A)-7, FOR THE QUANTUM OF ASSESSMENT U/S 143(3) OF THE ACT, FOR THE A.Y. 200 1-02, ON FOLLOWING GROUNDS:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALL OWANCE OF RS.43,32,075/- BEING THE PAYMENT TOWARDS REPAIRS AN D MAINTENANCE SERVICE CHARGES PAID TO SYCAMORE NETWOR K INC., USA VIOLATING THE PROVISIONS OF SECTION 40(A)(I) OF THE IT ACT? ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 2 2. AT THE OUTSET, LEARNED COUNSEL SUBMITTED THAT TH E LD. AO AS WELL AS LD. CIT(A) HAVE FOLLOWED THE EARLIER YEAR ORDER WHI CH HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER D ATED 25.09.2013 FOR THE A.YS. 2005-06 AND 2006-07 IN ITA NO. 7696 AND 1 676/MUM/2011. LD. DR ALSO ADMITTED THAT THE ISSUE INVOLVED IS COV ERED BY THE EARLIER ORDER OF THE TRIBUNAL. 3. THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.43,32,0 75/- AS ANNUAL MAINTENANCE CHARGES (AMC) PAID TO M/S. SYCAMORE NE TWORKS INC. USA. IN RESPONSE TO THE SHOW CAUSE NOTICE IN RESPECT OF TDS DEDUCTION, THE ASSESSEE SUBMITTED THAT THE EXPENDITURE IS IN THE N ATURE OF SERVICE CHARGES PAID FOR AMC THAT HAVE BEEN RENDERED FROM O UTSIDE INDIA SERVICE CENTRE AND ARE IN THE NATURE OF TROUBLE SHO OTING SUPPORT GIVEN THROUGH E-MAIL OR TELECOMMUNICATIONS, FURTHER IT IS NOT A PAYMENT WHICH CONSTITUTES FEES FOR INCLUDED SERVICES [FIS] IN TER MS OF ARTICLE 12(4) OF INDIA USA DTAA. THE ASSESSING OFFICER HELD THAT IN THE EARLIER YEAR SIMILAR ISSUE HAD COME UP FOR CONSIDERATION, WHEREI N THE AO HAS DISALLOWED THE SAME AND ADDED BACK TO THE TOTAL INC OME OF THE ASSESSEE. 4. BEFORE THE LD. CIT(A), DETAILS SUBMISSIONS WERE MADE AND WAS ALSO SUBMITTED THAT IN THE EARLIER YEARS. THE LD. CIT(A) , FOLLOWING THE SAME HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. 5. WE FIND THAT THE TRIBUNAL IN A.Y. 2005-06 AND 2006- 07 HAS DISCUSSED THIS ISSUE IN GREAT DETAIL. THE FINDING O F THE TRIBUNAL IN THIS REGARD IS AS UNDER:- WE SHALL NOW TAKE UP THE ISSUE RELATING TO AMC AND IT THE PAYMENTS MADE TO M/S SYCAMORE, USA, THE SUPPLIER OF THE EQUIPMENT, FOR RENDERING THE ANNUAL MAINTENANCE SER VICES - AMC ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 3 IN CONNECTION WITH THE OPERATION/FUNCTIONING OF THE SAID EQUIPMENT, VIDE THE SERVICE AGREEMENT, AMENDED FROM TIME TO TIME IN SUCCESSION OF THE SAID SERVICES RENDERED DU RING THE WARRANTY PERIOD. FOR THIS PURPOSE, WE NEED TO EXAMI NE THE RELEVANT PROVISIONS OF THE DOMESTIC LAW AS WELL AS THE TREATY PROVISIONS. THE PROVISIONS SUBSECTION (L)(VII) AND THE EXPLANATION TO SECTION 9 OF THE ACT ARE RELEVANT AND THE SAME R EAD AS FOLLOWS. (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY- (A) THE GOVERNMENT ,. OR (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICES UTILIZED IN A BUSINE SS OR PROFESSION CARRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARNING ANY INCOME FROM ANY SOURCE OUTSID E INDIA;' OR (C) A PERSON WHO IS A NON-RESIDENT, WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICES UTILIZED IN A BUSINE SS OR PROFESSION CARRIED ON BY SUCH PERSON IN INDIA OR FOR THE PURPO SES OF MAKING OR EARNING ANY INCOME FROM ANY SOURCE IN INDIA: PROVIDED . EXPLANATION [1... EXPLANATION [2}. -FOR THE PURPOSES OF THIS CLAUSE, 'FEES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUD ING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGER IAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJ ECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE IN COME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD 'SALARIES'] EXPLANATION.-FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT FOR THE PURPOSES OF THIS SECTION, INCOME OF A NON-R ESIDENT SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA UNDER CLAUSE (V) OR, CLAUSE (VI) OR CLAUSE (VII) OF SUB-SECTION (1) AND SHALL BE INC LUDED IN THE TOTAL INCOME OF THE NON- RESIDENT, WHETHER OR NOT,-(I) TH E NON-RESIDENT HAS A RESIDENCE OR PLACE OF BUSINESS OR BUSINESS CO NNECTION IN INDIA; OR (II) THE NON-RESIDENT HAS RENDERED SERVIC ES IN INDIA.' 14. THE ABOVE PROVISIONS DETAILS THE MEANING OF THE 'FEE FOR TECHNICAL SERVICES' AND ALSO THE PROVISIONS OF EXPL ANATION TO SECTION 9 WHICH IS INSERTED WITH RETROSPECTIVE AMEN DMENT PROVIDES FOR INCLUDING IN TOTAL INCOME ON THE DEEME D BASIS AND WHETHER OR NOT (I) THE NON-RESIDENT HAS A RESIDENCE OR PLACE OF ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 4 BUSINESS OR BUSINESS CONNECTION IN INDIA; OR (II) T HE NON-RESIDENT HAS RENDERED SERVICES IN INDIA.' NOW WE SHALL DEAL WITH THE RELEVANT TREATY PROVISIONS, WHICH IS OPTED BY THE A SSESSEE AS STATED BEFORE US. THE PROVISIONS OF THE ARTICLE 12 OF THE TREATY WITH THE USA ARE RELEVANT. THE SAME IS ALSO REPRODU CED HERE FOR COMPLETENESS OF THE ORDER,- ARTICLE 12 ROYALTIES AND FEES FOR INCLUDED SERVICES 1. ROYALTIES AND FEES FOR INCLUDED SERVICES ARISING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTH ER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. HOWEVER, SUCH ROYALTIES AND FEES FOR INCLUDED SE RVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THE Y ARISE AND ACCORDING TO THE LAWS OF THAT STATE; BUT IF THE BEN EFICIAL OWNER OF THE ROYALTIES OR FEES FOR INCLUDED SERVICES IS A RE SIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL N OT EXCEED: . . 3 . 4. FOR PURPOSES OF THIS ARTICLE, 'FEES FOR INCLUDED SERVICES' MEANS PAYMENTS OF ANY KIND TO ANY PERSON IN CONSIDERATION FOR THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THROUGH THE PROV ISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) IF SUCH S ERVICES: (A) ARE ANCILLARY AND SUBSIDIARY TO THE APPLICATION OR ENJOYMENT OF THE RIGHT, PROPERTY OR INFORMATION FOR WHICH A PAYM ENT DESCRIBED IN PARAGRAPH 3 IS RECEIVED; OR (B) MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW- HOW, OR PROCESSES, OR CONSIST OF THE DEVELOPMENT AN D TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIGN. 5. NOTWITHSTANDING PARAGRAPH 4, ''FEES FOR INCLUDED SERVICES' DOES NOT INCLUDE AMOUNTS PAID: (A) FOR SERVICES THAT ARE ANCILLARY AND SUBSIDIARY, AS WELL AS INEXTRICABLY AND ESSENTIALLY LINKED, TO THE SALE OF PROPERTY OTHER THAN A SALE DESCRIBED IN PARAGRAPH 3(A) ' ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 5 (B) FOR SERVICES THAT ARE ANCILLARY AND SUBSIDIARY TO THE RENTAL OF SHIPS, AIRCRAFT, CONTAINERS OR OTHER EQUIPMENT USED IN CONNECTION WITH THE OPERATION OF SHIPS OR AIRCRAFT IN INTERNAT IONAL TRAFFIC ' (C) FOR TEACHING IN OR BY EDUCATIONAL INSTITUTIONS ' (D) FOR SERVICES FOR THE PERSONAL USE OF THE INDIVI DUAL OR INDIVIDUALS MAKING THE PAYMENTS ; OR (E) TO AN EMPLOYEE OF THE PERSON MAKING THE PAYMENT S OR TO ANY INDIVIDUAL OR FIRM OF INDIVIDUALS (OTHER THAN A COM PANY) FOR PROFESSIONAL SERVICES AS DEFINED IN ARTICLE 15 (IND EPENDENT PERSONAL SERVICES). 6. 7. 8. 15. ARTICLE 12 OF THE TREATY RELATES TO THE ROYALTY AND THE FEE FOR INCLUDED SERVICES (IN SHORT 'FIS'). ANY TECHNICAL A ND CONSULTANCY SERVICES CONSTITUTES SUCH INCLUDED SERVICES VIDE PA RAGRAPH 4 OF THE SAID ARTICLE OF THE TREATY. PROVISIONS OF THE S AID PARAGRAPH 4 PROVIDE THAT THE PAYMENTS OF ANY KIND TO ANY PERSON IN CONSIDERATION FOR RENDERING OF ANY TECHNICAL OR CON SULTANCY SERVICES CONSTITUTES FIS. THESE SERVICES INCLUDE TH E SERVICES RENDERED THROUGH THE PROVISION OF TECHNICAL PERSONN EL OR OTHER PERSONNEL TOO. THIS PARAGRAPH 4 HAS TWO SUB PARAGRA PH. AS PER SUB PARAGRAPH (A), ALL THE ANCILLARY AND SUBSIDIARY SERVICES OF THAT NATURE TO THE APPLICATION OR ENJOYMENT OF THE RIGHT , PROPERTY OR INFORMATION FOR WHICH A PAYMENT DESCRIBED IN PARAGR APH 3 IN CONNECTION WITH ROYALTY IS RECEIVED. SURPRISINGLY, THERE IS NO WHISPER IN THE ORDER OF THE C!T(A) ON THE APPLICABI LITY OF THESE PROVISIONS. FURTHER, AS PER SUB PARAGRAPH (B), THE SERVICES OF 'MAKE AVAILABLE' OF THE TECHNOLOGY, EXPERIENCE,SKIL L, KNOW-HOW, OR PROCESSES ETC. M/S SYCAMORE USA ALLOWS THE ASSESSEE TO REACH HIM THROUGH THE ONLINE/WEBBASED PROCESSES DEVELOPED AND OWNED BY IT AND ON ACQUIRING THE EQUIPMENT, THE CUS TOMERS LIKE THE PRESENT ASSESSEE ACQUIRES THE 'RIGHT TO USE' SU CH PROCESSES OF M/S SYCAMORE. C!T(A) HAS NOT GONE INTO THESE ISSUES , WHICH HE SHOULD HAVE, WHEN THE ASSESSEE HAS CHOSEN TO OPT FO R THE TREATY PROVISIONS. FURTHER, IT IS EVIDENT, THE PARAGRAPH 5 OF THE ARTICLE 12 ENLISTS THE LIST OF SERVICES WHICH DO NOT AMOUNT TO FIS. THUS, THERE IS A NEED FOR ANALYZING IF THE SERVICES RENDE RED BY THE ASSESSEE DO NOT FALL IN SUB-PARAGRAPHS (A) OR (B) O F ARTICLE- 12 OF INDO-USA DTAA. IT IS THE CASE OF THE C!T(A), THE IM PUGNED ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 6 PAYMENTS DO NOT COME UNDER THE 'MAKE AVAILABLE' PRO VISIONS VIDE SUB-PARAGRAPH (B) OF ARTICLE 12(4) OF THE TREATY. B UT, IT IS A FACT THAT C!T(A) HAS NOT GONE INTO THE APPLICABILITY OF THE PROVISIONS CLAUSE (A) OF THE ARTICLE 12(4) OF THE TREATY. 16. DIVERGENT STANDS OF THE PARTIES IN DISPUTE: THE CASE OF THE ASSESSEE IS THAT THE PAYMENTS MADE BY THE ASSESSEE TOWARDS ANNUAL MAINTENANCE CHARGES DO NOT CONSTITUTE FEES F OR INCLUDED/TECHNICAL SERVICES (FTS) BOTH UNDER DOMEST IC LAW OR UNDER THE TREATY PROVISIONS AS THERE IS NO TRANSFER RELEVANT TECHNICAL KNOWLEDGE, SKILLS, INFORMATION ETC TO EIT HER TO THE ASSESSEE OR TO ITS EMPLOYEES. THE SERVICES RENDERED BY M/S SYCOMORE SUPRA ARE MERELY ATTENDING TO THE TROUBLE SHOOTINGS RELATING TO THE USE OF THE TECHNOLOGY ALREADY SUPPL IED TO THE ASSESSEE. 17. PER CONTRA/ THE CASE OF THE REVENUE IS THAT WIT H NO BODY EXAMINING THE APPLICABILITY OF THE DOMESTIC LAW AND THE PROVISION S OF PARAGRAPH 4(A) OF THE TREATY, IT IS TOO EARLY TO ADJUDGE THAT THE IMPUGNED PAYMENTS DO NOT CONSTITUTE FIS/FTS. THE SERVICE AGR EEMENT ALSO PROVIDE FOR SENDING OF THE 'REPRESENTATIVES' BY M/S . SYCAMORE, WHO IS THE SUPPLIER OF THE EQUIPMENT IE DENSE WAVE DIVISION MULTIPLEXING EQUIPMENT TO THE ASSESSEE. IMPUGNED SE RVICES VIDE THE SERVICE AGREEMENT W E F APRIL 2003 ONWARDS WITH THE CLAUSE OF AUTOMATIC EXTENSION, ARE RENDERED. CONSIDERING T HE EXAMPLES GIVEN UNDER THE MOU ANNEXED TO THE TREATY, THE IMPU GNED PAYMENTS SHALL CONSTITUTE CHARGEABLE INCOME INCLUDI BLE IN THE TOTAL INCOME OF THE ASSESSEE. THERE IS NEED FOR EXA MINING THE PURCHASE DEED, ADDED ON WARRANTY PROVISIONS, SERVIC E AGREEMENT, MODIFIED AGREEMENTS, REVISED AGREEMENTS ETC IN THE LIGHT OF THE PROVISIONS OF THE PARAGRAPH 4 OF THE TREATY. OBVIOU SLY, THE CIT(A), WHO CONSIDERED ONLY THE PROVISIONS OF PARAG RAPH 4(B) OF THE TREATY, HAS NOT EXAMINED THIS ASPECT OF THE IMP UGNED ARTICLE 12 OF THE TREATY. 18. APPLYING TO THE PRESENT CASE: KEEPING THE ABOVE SCOPE AND LEGAL POSITION, WE HAVE PERUSED THE ORDERS OF THE A O AND THE CIT (A) FOR BOTH THE AYS UNDER CONSIDERATION. PRIMA FAC IE/ WE FIND THAT THE REVENUE'S OBJECTIONS WERE DISCUSSED AT LEN GTH IN CONNECTION WITH THE APPLICABILITY OF SUB-CLAUSE (B) OF CLAUSE-4 OF THE ARTICLE WHICH RELATES TO 'MAKE AVAILABLE' PROVI SIONS. IF THE ONLINE FACILITIES ARE AVAILABLE TO THE ASSESSEE THR OUGH WHICH TECHNICAL TROUBLES ARE SORTED OUT BY USING SUCH PRO CESSES. THERE ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 7 IS NO WHISPER ABOUT THIS 'PROCESSES' WHICH SHOULD B E DONE CONSIDERING THE NATURE OF SUB-CLAUSE (B) OF ARTICLE -12(4). FURTHER, WE ALSO FIND THAT THERE IS NO DISCUSSION ABOUT THE APPLICABILITY OF THE ARTICLE- 12 (4)(A) WHICH DEALS WITH ANCILLARY A ND SUBSIDIARY SERVICES. AS SUCH, IT IS AN UNDISPUTED FACT THAT TH E ASSESSEE OBTAINED PURCHASED MACHINERY AND THE PAYMENTS WERE MADE IN ACCORDANCE WITH THE ARTICLE-12(3) OF THE TREATY. WE DO NOT HAVE ACCESS TO THE RELEVANT AGREEMENT FOR PURCHASE OF TH E MACHINERY IF THE SO CALLED AMC SERVICES RENDERED CONSTITUTE 'INC LUDED SERVICES' IN THE SENSE OF ARTICLE-12(4)(A) OF THE INDO- USA D TAA. 19. IN THIS REGARD, WE HAVE ALSO EXAMINED THE JUDGM ENTAL LAWS CITED BEFORE US. REGARDING THE PRECEDENTS CITED BY THE LD DR, WE FIND THAT THEY ARE DISTINGUISHABLE ON FACTS. AS ALR EADY DISCUSSED, THE RULING OF THE A.A.R IN THE CASE OF PERFETTI VAN MELLE HOLDING B. V(SUPRA), THE DTAA WITH NETHERLANDS AND THE INTE RPRETATION THERETO, THEY HAVE NO APPLICATION TO THE PRESENT CA SE. AS SUCH, THE SAID DECISION WAS TAKEN BASING ON THE UNDISPUTE D FACT THAT THE ASSESSEE'S EMPLOYEES WERE TRAINED AND THERE WAS TRANSFER OF KNOWLEDGE AND EXPERIENCE BY THE SERVICE PROVIDING C OMPANY. FURTHER, THE DECISION IN THE CASE OF IN THE CASE OF AREVA T&D INDIA LIMITED (SUPRA) ON THE APPLICABILITY OF PROVI SIONS OF SECTION 9 OF THE ACT; BUT NOT ON THE TREATY PROVISIONS BETW EEN INDIA AND FRANCE. THUS, THESE CASES LAW ARE DISTINGUISHABLE. 20. CONCLUSIONS: THEREFORE, WE FIND THE CIT(A) REST RICTED HIS ENQUIRY AND ADJUDICATION INADEQUATELY TO THE PROVIS IONS OF ARTICLE 12(4)(B) OF THE TREATY AND LEFT THE ISSUES TO LIKE 'PROCESSES' AND FURTHER OF COURSE, HE HA NOT CONSIDERED THE PROVISI ONS OF ARTICLE 12(4)(A) OF THE TREATY ENTIRELY. HE COMPLETELY IGNO RED THE FACT THAT THE SERVICE AGREEMENTS HAVE REAL GENESIS IN TH E PURCHASE AGREEMENT QUA THE EQUIPMENT IE DENSE WAVE DIVISION MULTIPLEXING EQUIPMENT. THE IMPUGNED SERVICE AGREEM ENTS, AS AMENDED FROM TIME TO TIME, ARE REQUIRED TO BE STUDI ED IN CONJUNCTION WITH THE PURCHASE AGREEMENT OF THE EQUI PMENT IF THE SERVICES WHICH ARE RENDERED CONSTITUTES EXTENDED WA RRANTY WITH ADDITIONAL PAYMENTS BY WAY OF AMC. REGARDING THE FI NDING OF THE CIT(A) ON THE APPLICABILITY OF THE PROVISIONS OF AR TICLE 12(4)(B) OF THE TREATY, TO THE EXTENT HE ADJUDICATED, THE SAME DO NOT NEED ANY INTERFERENCE SUBJECTED TO THE LIKELY FINDING OF THE C!T(A) IN THE ENSUING REMAND PROCEEDINGS ON IF THE 'PROCESSES ' ARE NOT MADE AVAILABLE TO THE ASSESSEE AND THE ONLINE AND W EB-BASED SERVICES DO NOT CONSTITUTES MAKING AVAILABLE TO THE ASSESSEE. AS SUCH, ON PERUSAL OF THE AGREEMENT BETWEEN THE ASSES SEE AND ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 8 SYCAMORE NETWORKS INC, USA IN ISOLATION, WE FOUND T HAT THE SAID PROVISIONS DO NOT IMPLY THE TRANSFER OF TECHNICAL K NOWLEDGE OR SKILLS TO THE ASSESSEE OR TO ITS EMPLOYEES. HOWEVER , CONSIDERING THE PECULIAR FACTS OF THIS CASE, THERE IS NEED FOR ANALYZING THE PURCHASE AGREEMENT OF THE EQUIPMENT IF ANY AND RELA TED CLAUSE ON WARRANTY AND SERVICES ENLISTED THEREIN AND THE S UBSEQUENT SERVICE AGREEMENTS AS AMENDED SUBSEQUENTLY. WE FIND THE SUBSEQUENT SERVICE AGREEMENTS ARE MERELY THE 'AUTOM ATIC EXTENSIONS' AND THEREFORE, THERE IS NEED FOR EXAMIN ING THE APPLICABILITY OF THE PROVISIONS OF ARTICLE 12(4)(A) IF THESE SERVICES CONSTITUTE 'ANCILLARY AND SUBSIDIARY TO THE APPLICA TION OR ENJOYMENT OF THE RIGHT, PROPERTY OR INFORMATION FOR WHICH A PAYMENT DESCRIBED IN PARAGRAPH 3 IS RECEIVED': AS S UCH THERE IS NO FINDING OF FACT OF THE STAND OF THE REVENUE IN T HE AY PRIOR TO THE AY 2005-06 AND LATER AFTER THE AY 2006-07. OTHE RWISE, THE ANNUAL MAINTENANCE CHARGES PAID BY THE ASSESSEE TO THE SYCAMORE NETWORKS INC, USA DO NOT INVOLVE ANY DEPUT ATION OF ITS EMPLOYEES TO THE ASSESSEE FOR EQUIPPING THEM WITH T HE TECHNICAL KNOWLEDGE, TECHNICAL SKILLS ETC IMPARTED BY THE SYC AMORE NETWORKS INC, USA. THERE IS ALSO NO IMPARTING OF SU CH KNOWLEDGE AS OF TECHNICAL NATURE FOR WHICH ASSESSEE NEEDS ANY RIGHTS OF OWNERSHIP OR EXPERTISE. THEREFORE, FROM THE POINT O F VIEW OF THE PROVISIONS OF ARTICLE 12(4)(B), IT IS A CASE OF MER E ATTENDING TO THE SERVICES BY THE SYCAMORE NETWORKS INC, USA TO THE C OMPLAINTS / TROUBLESHOOTING OF THE ASSESSEE/ASSESSEE'S CUSTOMER S THROUGH ONLINE REQUESTS. AS SUCH NOTHING IS BROUGHT ON RECO RD BY THE DR TO COUNTER THE FINDINGS OF THE CIT (A) WITH REGARD TO HIS CONCLUSIONS ON THE APPLICABILITY OF THE PROVISIONS OF ARTICLE 12(4)(B) TO THE EXTENT ANALYZED AND ADJUDICATED. TH US, FOR THE LIMITED PURPOSE OF EXAMINING THE (I) APPLICABILITY OF ARTICLE 12(4)(A); AND (II) THE ARTICLE 12(4)(A) TO THE EXTE NT OF 'MAKE AVAILABLE' OF THE 'PROCESSES' MENTIONED THEREIN, WE REMAND THE MATTER TO THE FILES OF THE CIT(A) FOR FRESH EXAMINA TION AND ADJUDICATION AFTER OBTAINING THE RELEVANT FACTS. AS SESSEE IS DIRECTED FILE RELEVANT INFORMATION IN THIS REGARD. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE IN BOTH THE APPEALS A RE REMANDED PRO-TANTO. THUS, CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNA L IN THE EARLIER YEARS, WE ALSO ON SIMILAR LINE OF DIRECTION REMAND THE MAT TER TO THE FILE OF THE LD. CIT (A) TO BE DECIDED ACCORDINGLY. ITA NO. 1591/MUM/2013 ASSESSMENT YEAR: 2007-08 9 6. IN THE RESULT, THE REVENUES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF APRIL, 2015. SD/- SD/- (R.C. SHARMA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 07.04.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR F BENCH // TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.