DDIT (I.T) 2(1), MUMBAI V. M/s. REUTERS TELEVISION, MUMBAI

ITA 4034/MUM/2005

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8426 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: L
• Next Hearing Date: 01-08-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 30-05-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P J PARDIWALLA
• Keywords: Business income; Double taxation relief; Permanent establishment
• Section: 234B; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI L BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI R S SYAL , AM & SHRI VIJAY PAL RAO, JM ITA NO. 4034/MUM/2005 (ASST YEAR 2001-02) THE DY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 2-1 MUMBAI VS M/S REUTERS TELEVISION LTD C/O S R BATLIBOI & CO 18 TH FLOOR, EXPRESS TOWERS NARIMAN POINT MUMBAI 21 (APPELLANT) (RESPONDENT) PAN NO. AABCR9994G ASSESSEE BY SHRI P J PARDIWALLA REVENUE BY SHRI MAHESH KUMAR DT.OF HEARING 11 TH OCT 2012 DT OF PRONOUNCEMENT 30 TH , OCT 2012 PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 16.4.2004 OF THE COMMISSIONER OF INCOME TAX(APPEALS) FOR THE ASS ESSMENT YEAR 2001-02. 2 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE LOCATIONAL SPECIAL REVENUES OF RS.12,7 1,822/- IS NOT IN THE NATURE OF FEES FOR TECHNICAL SERVICES A S PER ARTICLE 13 OF THE DTAA BETWEEN INDIA AND UK. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT NO LIABILITY U/S 234B AND 234C ARISE, IGNORING THE FACT: (I) THAT SINCE THE TAX DEDUCTED AT SOURCE WAS NOT A DEQUATE TO MEET THE ENTIRE TAX LIABILITY, IT WAS OBLIGATION ON THE P ART OF THE ASSESSEE TO MAKE THE DEFICIT GOOD BY MAKING THE PAYMENTS TOWARD S THE ADVANCE TAX; (II) THAT SINCE THE ASSESSEE FAILED TO PAY THE ADVA NCE TAX, THE ASSESSING OFFICER WAS RIGHT IN CHARGING INTEREST U/S 234B AND 234 C OF THE I.T. ACT, 1961. ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 2 3 GROUND NO.1 IS REGARDING THE FEE FOR TECHNICAL SE RVICES. 3.1 THE ASSESSEE IS A COMPANY INCORPORATED UNDER TH E LAWS OF ENGLAND AND IS TAX RESIDENT OF UNITED KINGDOM. THE ASSESSEE IS IN THE BUSINESS OF PROVIDING TELEVISION NEWS SERVICES INCLUDING AUDIO-VISUAL FEED TOGETHER WITH TEXTURAL SCRIPTING INFORMATION, DESKTOP LIBRARY SERVICES ETC. TO CUSTOMERS IN INDIA . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF ` 12,71,822/- FOR RENDERING LOCATIONAL SPECIAL A SERVICE TO A CUSTOMERS IN INDIA. 3.2 THE ASSESSING OFFICER ASKED THE ASSESSEE AS TO WHY THE PAYMENT FOR RENDERING THESE SERVICES SHOULD NOT BE TREATED AS FEES FOR T ECHNICAL SERVICES AS PER SEC. 9(1)(VII) OF THE I T ACT AND ACCORDINGLY TAXED AS PER ARTICLE 13 OF THE INDO-UK DTAA. 3.3 IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE L OCATION SPECIAL IS A SERVICE WHEREIN A CUSTOMER ASKS THE ASSESSEE TO FILM A PART ICULAR EVENT, MEETING, ETC., ACCORDINGLY, THE PAYMENT IS FOR THE SERVICES FOR MAKING AND PRODUCING THE TELEVISION FILM. THE ASSESSEE CONTENDED THAT THE REVENUE EARNED BY THE ASSESSEE BY RENDERING LOCATION SPECIAL SERVICES TO ITS CUS TOMERS DOES NOT QUALITY AS ROYALTY OR FEES FOR TECHNICAL SERVICES UNDER ARTICLE 13 OF THE INDO-UK TREATY. IT WAS FURTHER SUBMITTED THAT AS PER ARTICLE 7 OF THE INDO-UK TREA TY, BUSINESS PROFITS OF A UNITED KINGDOM TAX RESIDENT COMPANY ARE TAXABLE IN INDIA, ONLY IF IT HAS A PERMANENT ESTABLISHMENT (PE) AND IN SUCH A CASE, ONLY TO THE EXTENT OF THE PROFITS ARE ATTRIBUTABLE TO THE PE IN INDIA. SINCE FOR THE YE AR ENDED 31 ST MARCH 2001, THE ASSESSEE DID NOT HAVE PE IN INDIA AS CONTEMPLATED B Y ARTICLE 5 OF THE INDO-UK TREATY; THEREFORE, THE REVENUES EARNED BY THE ASSESSEE FOR RENDERING LOCATION SPECIAL ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 3 SERVICES ARE NOT LIABLE TO TAX IN INDIA AS PER THE TREATY. THE ASSESSEE HAS ALSO CONTENDED THAT AS PER THE DEFINITIONS PROVIDED UND ER ARTICLE 13 OF INDO-UK TREATY, THE TERM FEE FOR TECHNICAL SERVICES MEANS AS PER PARA 4 (C) OF ARTICLE 13 OF INDO-UK TREATY, THE PAYMENT IN CONSIDERATION FOR RENDERING TECHNICAL OR CONSULTANCY SERVICES WHICH MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENC E, SKILL, KNOW-HOW OR PROCESS, OR CONSIST OF THE DEVELOPMENT AND TRANSFER OF A TEC HNICAL PLAN OR TECHNICAL DESIGN. 3.3 THUS, IT WAS CONTENDED THAT THE ASSESSEE DOES N OT PROVIDE TECHNICAL OR MANAGERIAL OR CONSULTANCY SERVICES. WHAT THE ASSESS EE DOES IS TO PRODUCE A PARTICULAR EVENT, MEETING ETC. AS REQUIRED BY THE C LIENT AND SELL THE FILM/PROGRAMME AS A PRODUCT TO THE CUSTOMER. THUS, THE ACTIVITY U NDERTAKEN BY THE ASSESSEE IS IN THE NATURE OF PRODUCTION AND THE FINAL PRODUCT IS MADE AVAILABLE TO THE CLIENT. 3.4 THE ASSESSING OFFICER DID NOT ACCEPT THE CONTEN TION OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE WAS ASKED TO FURNISH THE COPIES OF THE INVOICES, AGREEMENT, LETTERS ETC., WITH RESPECT TO THE WORK D ONE FOR THE VARIOUS CUSTOMERS; BUT, THE ASSESSEE DID NOT FURNISH ANY SUCH DETAILS. ACC ORDINGLY, THE ASSESSING OFFICER WAS OF THE VIEW THAT IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, ONE HAS TO ASSUME THAT THE ASSESSEE IS RENDERING THE SERVICE OF SHOO TING A FILM FOR ITS CUSTOMERS AND THEREFORE, THE SAID SERVICE IS COVERED AS FEES FOR TECHNICAL SERVICES U/S 9(1)(VII)(B) R.W. EXPLANATION 2 . CONSEQUENTLY, THE ASSESSING O FFICER HELD THAT THE PAYMENT OF ` 12,71,822/- RECEIVED BY THE ASSESSEE IS FOR PROVID ING LOCATIONAL SERVICES IS IN THE NATURE OF FEES FOR TECHNICAL SERVICES AND IS TAXA TION @ 15% AS PER ARTICLE 13 OF THE DTAA BETWEEN INDIA & UK. ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 4 4 ON APPEAL, THE COMMISSIONER OF INCOME TAX(APPEALS ), THOUGH HAS CONCURRED WITH THE VIEW OF THE ASSESSING OFFICER TO THE EXTENT THAT THESE SERVICES QUALIFY TO BE TREATED AS FEE FOR TECHNICAL SERVICES UNDER THE PROVISIONS OF SEC. 9(1)(VII)(B) R.W EXPLANATION 2. HOWEVER, THE COMMI SSIONER OF INCOME TAX(APPEALS) WAS OF THE VIEW THAT THE PAYMENT COULD NOT FALL UND ER THE DEFINITION OF FEE FOR TECHNICAL SERVICES AS PER ARTICLE 13 OF THE DTAA. ACCORDINGLY, THE COMMISSIONER OF INCOME TAX(APPEALS) HELD THAT THE AMOUNT RECEIVED B Y THE ASSESSEE FOR MAKING AND PRODUCING THE TELEVISION FILM AND NOT FOR MAKIN G AVAILABLE ANY TECHNICAL KNOW- HOW, SKILL ETC. HENCE, IN VIEW OF THE COMMISSIONER OF INCOME TAX (APPEALS), SUCH RECEIPTS DEFINITELY CONSTITUTE BUSINESS INCOME AND IN THE ABSENCE OF PE NOT TAXABLE IN INDIA. 5 BEFORE US, THE LD DR HAS SUBMITTED THAT THE ASSES SEE HAS NOT PRODUCED ANY DETAILS, AGREEMENT, BILLS/INVOICES/LETTERS IN RESPE CT OF THE WORK DONE FOR VARIOUS CUSTOMERS TO SHOW THE REAL NATURE OF THE SERVICES R ENDERED BY THE ASSESSEE. IN THE ABSENCE OF THE RELEVANT DOCUMENTS, IT CANNOT BE SAI D THAT THE ASSESSEE HAS MERELY PRODUCED A FILM FOR ITS CUSTOMER. HE HAS REFERRED THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSING OFFICER HAS DECIDED THE ISSUE IN THE ABSENCE OF ANY RECORD TO SHOW THAT THE PAYMENT RECEIVED BY THE AS SESSEE IS OTHER THAN THE FEE FOR TECHNICAL SERVICES. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO NOT PRODUCED ANY RECORDS BEFORE THE COMMISSIONER OF INC OME TAX(APPEALS). THE COMMISSIONER OF INCOME TAX(APPEALS) HAS ALSO CONCU RRED WITH THE VIEW OF THE ASSESSING OFFICER THAT THE PAYMENT RECEIVED BY THE ASSESSEE IS IN THE NATURE OF FEE FOR TECHNICAL SERVICES AS PER SEC 9(1)(IVII)(B) R.W EXPL. 2. HOWEVER, THE COMMISSIONER OF INCOME TAX(APPEALS) HAS GRANTED RELIEF TO THE AS SESSEE BY HOLDING THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS FOR MAKING PRODU CTION OF TELEVISION FILM ARE NOT ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 5 FOR TECHNICAL KNOW HOW AS PER ARTICLE 13 OF INDO-U K TREATY. THE LD DR HAS SUBMITTED THAT THIS FINDING OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FINDING THAT THESE SERVICES WILL QUALIFY TO BE TREA TED FOR FEE FOR TECHNICAL SERVICES UNDER THE PROVISIONS OF SEC. 9(1)(VII)(B) R.W EXPL. 2. HE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT IN THE ABS ENCE OF RELEVANT RECORD AND PARTICULARLY AGREEMENT AND INVOICES, HOW IT CAN BE HELD THAT TECHNICAL SERVICES WAS NOT MADE AVAILABLE. 5.1 ON THE OTHER THE HAND, THE LD SR COUNSEL SHRI P J PARDIWALLA HAS SUBMITTED THAT LOCATION SPECIAL IS SERVICE WHEREIN A CUSTOM ER ASKS THE ASSESSEE TO FILM A PARTICULAR EVENT, MEETING, ETC. ACCORDINGLY, THE PA YMENT IS FOR THE SERVICES OF MAKING AND PRODUCING THE TELEVISION FILM. THE LD S R COUNSEL HAS SUBMITTED THAT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2001 THE ASSESSE E EARNED ` 1,271,822 FROM RENDERING LOCATION SPECIALS SERVICE. FURTHER, I T IS SUBMITTED THAT THE REVENUES EARNED BY THE ASSESSEE BY RENDERING LOCATION SPECI AL SERVICES TO ITS CUSTOMERS DOES NOT QUALIFY AS ROYALTY OR FEES FOR TECHNICAL S ERVICES (ARTICLE 13) UNDER THE TREATY. FURTHER, LD SR COUNSEL HAS SUBMITTED THAT AS PER ARTICLE 7 OF THE TREAT THE BUSINESS PROFITS OF A UNITED KINGDOM TAX RESIDENT C OMPANY ARE TAXABLE IN INDIA, ONLY IF IT HAS A PERMANENT ESTABLISHMENT (PE) IN INDIA AND IN SUCH CASE, ONLY TO THE EXTENT THE PROFITS ARE ATTRIBUTABLE TO THE PE IN INDIA. FO R THE YEAR ENDED MARCH 31, 2001, THE ASSESSEE DID NOT HAVE PE IN INDIA AS CONTEMPLATED B Y ARTICLE 5 OF THE TREATY. THEREFORE THE REVENUES EARNED BY THE ASSESSEE FROM RENDERING LOCATION SPECIAL SERVICES ARE NOT LIABLE TO TAX IN INDIA, AS PER THE TREATY. ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 6 5.2 THE LD SR COUNSEL HAS SUBMITTED THAT THE ASSES SEE HAS EXPLAINED BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS) IN PARAS 4.3 AS TO WHY THE REVENUES CANNOT BE TREATED AS FEES FOR TECHNICAL SERVICES UNDER A RTICLE 13 OF THE INDIA - UK TREATY IS INTER ALIA DEFINED AS UNDER: PAYMENTS OF ANY KIND IN CONSIDERATION FOR THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISIONS OF TE CHNICAL OR OTHER PERSONNEL) WHICH; A. ARE ANCILLARY AND SUBSIDIARY TO THE APPLICATION O R ENJOYMENT OF THE RIGHT, PROPERTY OR INFORMATION FOR WHICH A PAYMENT DESCRIBED IN PARAGRAPH 3(A) OF THIS ARTICLE IS RECEIVED. B. ARE ANCILLARY AND SUBSIDIARY TO THE ENJOYMENT OF THE PROPERTY FOR WHICH A PAYMENT DESCRIBED IN PARAGRAPH 3(B) OF THIS ARTICLE IS RECEIVED C. MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW-HOW OR PROCESSES, OR CONSIST OF THE DEVELOPMENT AND TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIGN. THE TERM FEES FOR TECHNICAL SERVICES HAVE BEEN GENE RALLY DEFINED IN THE DTAS AS MEANING CONSIDERATION FOR THE SERVICES OF A M ANAGERIAL, TECHNICAL OR CONSULTANCY NATURE, INCLUDING THE PROVISION OF SERVICE S OF TECHNICAL OR OTHER PERSONNEL. 1. TECHNICAL SERVICES MEAN SERVICES REQUIRING EXPERTI SE IN A TECHNOLOGY, CONSULTANCY SERVICES MEAN ADVISORY SERVICES. 2. CONSULTANCY SERVICES COULD ALSO BE ADVISORY SERVIC ES RELATING TO MANAGERIAL OR TECHNICAL MATTERS. 3. MANAGERIAL SERVICES MEAN SERVICES REQUIRING EXPERTISE IN INDUSTRIAL OR BUSINESS MANAGEMENT TECHNIQUES. THUS, MANAGERIAL SE RVICES MEAN SERVICES BY PERSONS HAVING KNOWLEDGE AND EXPERIENCE, INDUSTRI AL OR BUSINESS MANAGEMENT TECHNIQUES. THEREFORE, TO QUALIFY AS FEES FOR TECHNICAL SERVICES T HE AMOUNT RECEIVED SHOULD BE IN THE NATURE OF FEES FOR CONSULTANCY/ADVISORY SER VICES OF MANAGERIAL OR TECHNICAL NATURE. IT WILL INVOLVE PROVIDING OF MANAGE RIAL OR TECHNICAL EXPERTISE BASED ON WHICH THE ACTUAL EXECUTION OF WORK WILL BE CARRIED OUT BY THE RECIPIENT OF THE SERVICES. REUTERS TELEVISION DOES NOT PROVIDE ANY TECHNICAL, M ANAGERIAL OR CITAERVICE.IATP7 DOES IS TO PRODUCE A PARTICULAR EVENT , MEETING, ETC. AS REQUIRED BY THE CLIENT AND SELL THE FILM/PROGRAM AS A PRODUCT TO THE CUSTOMER. THE MATERIAL REQUIRED TO MAKE THE FILMS LIKE THE RAW STOCK, ETC. BELONGS TO REUTERS TELEVISION LIMITED AND A FINAL PRODUCT IS MA DE AVAILABLE TO THE CLIENT. ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 7 THUS THE ACTIVITY UNDERTAKEN BY RTV IS IN THE NATUR E OF PRODUCTION AND A FINAL PRODUCT IS MADE AVAILABLE TO THE CLIENT. TO CONCLUDE, THE LOCATION SPECIAL REVENUE RECEIVE D BY REUTERS TELEVISION LIMITED IS IN THE NATURE OF BUSINESS INCOME OF REUT ERS TELEVISION AND DOES NOT CONSTITUTE FEES FOR TECHNICAL SERVICES. 5.2 HE HAS RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF RAYMOND LIMITED VS DCIT REPORTED IN 80 TTJ (MUMBAI) 120 AND SUBMITTED THAT THE TRIBUNAL HAS ELABORATELY DISCUSSED AND DEALT WITH THE ASPECT OF FEE FOR TECHNICAL SERVICES FOR MAKING AVAILABLE AS PER INDO-UK DTAA WHEREIN IT HAS BEEN HELD THAT THE MAKING AVAILABLE IS SOMETHING MORE THAN A MERE RENDERING O F SERVICES. THE LD SR COUNSEL HAS REFERRED THE FINDING OF THE TRIBUNAL AND SUBMITTED THAT THE MEANING OF WORD MAKE AVAILABLE AS USED IN ARTICLE 13 OF INDO-UK TREATY REFERS THAT THE PERSON UTILISING THE SERVICES IS ABLE TO MAKE USE OF THE TECHNICAL KNOWL EDGE ETC., BY HIMSELF IN HIS BUSINESS OR FOR HIS OWN BENEFIT AND WITHOUT RECOURS E TO THE PERFORMER OF SERVICES IN FUTURE. THE TECHNICAL KNOWLEDGE, EXPERTISE, SKILL ETC., MUST REMAIN WITH THE PERSON UTILISING THE SERVICES EVEN AFTER THE RENDERING OF THE SERVICES HAS COME TO AN END. THUS, THE LD SR COUNSEL HAS SUBMITTED THAT THE SERV ICES RENDERED BY THE ASSESSEE IS MERELY A PRODUCTION OF FILM AND NOT MAKING AVAILABL E ANY TECHNICAL SERVICES, EXPERTISE, KNOWLEDGE ETC., TO ITS CUSTOMERS. HE HA S ALSO REFERRED THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS GUY CARPENTER & CO LTD DATED 23RD APRIL 2012 IN ITA NO. 202 OF 2012 AND SUBMITTED T HAT THE HONBLE HIGH COURT HAS UPHELD THE DECISION OF THE TRIBUNAL IN THE CASE OF RAYMOND LIMITED(SUPRA). THUS, THE LD SR COUNSEL HAS SUBMITTED THAT THE ASSESSEE HAS P ROVIDED ONLY A PRODUCT BY UTILISING THE TECHNICAL EXPERTISE AND NOT THE TECHNICAL SERVI CES. ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 8 6 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE AS FAR AS THE ISSUE IS SETTLED ON LEGAL PRINCIPAL BY THE DECISION OF THE TRIBUNAL IN THE CASE OF RAYMOND LTD (SUPRA). HOWEVER, THE LAW CANNOT BE APPLIED IN VACUUM; BUT IT HAS TO BE APPLI ED ON UNDISPUTED FACTS OF THE CASE. IN THE CASE IN HAND, IT IS NOT CLEAR FROM TH E RECORD AS WHAT IS THE ACTUAL NATURE OF SERVICES RENDERED BY THE ASSESSEE TO THE CUSTOME RS. TO ASCERTAIN THE REAL NATURE OF SERVICES RENDERED BY THE ASSESSEE ONE HAS TO EXA MINE THE RELEVANT RECORD I.E. AGREEMENT BETWEEN THE PARTIES AND THE TERMS AND CON DITIONS AND RESPECTIVE OBLIGATION AND RIGHTS OF THE PARTIES. THE INVOICES AND THE CORRESPONDENCES BETWEEN THE PARTIES IN RESPECT OF THE SERVICES RENDERED OR THE WORK CARRIED OUT BY THE ASSESSEE IS ALSO RELEVANT TO DETERMINE THE REAL NA TURE OF THE SERVICES RENDERED BY THE ASSESSEE. THE ASSESSING OFFICER HAS SPECIFICAL LY ASKED THE ASSESSEE TO FURNISH ALL THE INVOICES, AGREEMENT, LETTERS ETC., IN RESPECT O F THE WORK DONE FOR VARIOUS CUSTOMERS. BUT THE ASSESSEE FAILED TO FURNISH ANY D ETAILS OR RELEVANT DOCUMENTS. THE RELEVANT PART OF THE ASSESSMENT ORDER IN PARA 4 IS AS UNDER: 4. THE ASSESSEE WAS ASKED VIDE ORDER SHEET NOTING DA TED 16.1.2004 TO FURNISH COPIES OF INVOICES/AGREEMENTS/LETTERS ETC. I N RESPECT OF THE WORKS DONE FOR THE VARIOUS CUSTOMERS, BUT THE ASSESSEE DI D NOT FURNISH ANY SUCH DETAILS. NON FURNISHING OF SUCH DETAILS AMOUNTS TO CONCEALMENT OF CERTAIN FACTS FROM THE DEPARTMENT WHICH COULD BE USED AGAINS T THE SUBMISSIONS MADE BY THE ASSESSEE. BUT FOR THIS, THERE WAS NO REAS ON WHY THE ASSESSEE DID NOT FURNISH SUCH DOCUMENTS WHEN THE SAME WERE SPECIF ICALLY CALLED FOR BY THE UNDERSIGNED. WITH THIS BACKGROUND OF THE ASSESSEE, L ET US NOW UNDERSTAND THE NATURE OF WORK OF DONE BY IT.. LOCATIONAL; SERVICE IS SERVICE WHEREIN THE CUSTOMER ASKS THE ASSESSEE TO FILM A PARTICULAR EVE NT, MEETING ETC. IN ABSENCE OF ANY DOCUMENTARY EVIDENCE AS TO WHAT ARE TH E VARIOUS ASPECTS OF THE UNDERSTANDING BETWEEN THE ASSESSEE AND ITS CUST OMERS, ONE HAS TO ASSUME THAT THE ASSESSEE IS RENDERING THE SERVICE OF SHOOTING A FILM FOR ITS CUSTOMERS. THE SAID SERVICE IS COVERED AS FEES FOR TECHNICAL SERVICES U/S 9(1)(VII)(B) READ WITH EXPLANATION 2. 6.1 ON APPEAL, THE COMMISSIONER OF INCOME TAX(APPEA LS), THOUGH CONCURRED WITH THE VIEW OF THE ASSESSING OFFICER TO THE EXTENT OF SERVICES PROVIDED BY THE ASSESSEE ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 9 WILL QUALIFY TO BE TREATED AS FEE FOR TECHNICAL SE RVICES UNDER THE PROVISIONS OF SEC. 9(A)(IVII)(B) R.W EXPLANATION 2 IN PAA 4.4.2 AS UN DER 4.4.2 IN SO FAR AS THE I.T. ACT IS CONCERNED, THERE C ANNOT BE ANY DOUBT THAT THESE SERVICES WILL QUALIFY TO BE TREATED AS FEES FO R TECHNICAL SERVICES UNDER THE PROVISIONS OF SEC. 9(A)(VII)(B) READ WITH EXPLAN ATION 2. TO THAT EXTENT, RELIANCE ON THE DECISIONS OF GVK INDUSTRIES AND OBERO I HOTELS IS ALSO JUSTIFIED. HOWEVER, COMING TO THE TAXABILITY UNDER THE PROVISION S OF ARTICLE 13 OF THE INDO-UK DTAA, WHICH DEALS WITH FEES FOR TECHNICAL S ERVICES; IT IS A DIFFERENT BALL GAME. UNDER ARTICLE 13 OF THE DTAA, FEES FOR TECHNIC AL SERVICES MEANS A PAYMENT FOR RENDERING OF TECHNICAL OR CONSULTANCY SERVI CE WHICH MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, K NOW-HOW OR PROCESSES, OR CONSISTS OF DEVELOPMENT AND TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIGN. THEREFORE, THE POINT WHICH NEEDS TO BE SATISFIED FOR TAXABILITY UNDER THE DTAA IS WHETHER THE APPELLANT IS MAKING AVAILABLE TECHNIC AL KNOWLEDGE, EXPERIENCE ETC. TO THE CUSTOMERS FOR AND ON WHOSE BE HALF LOCATION SPECIAL SERVICES ARE RENDERED. 6.2 HOWEVER, THE COMMISSIONER OF INCOME TAX(APPEALS ) HAS FINALLY HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS FOR MAKING AND P RODUCING THE TELEVISION FILM AND NOT FOR MAKING ANY TECHNICAL KNOW-HOW, SKILL ETC I N PARA 4.4.4 AS UNDER: 4.4.4 NOW IN THE BACKDROP OF THIS UNDERSTANDING OF THE TERM MAKE AVAILABLE UNDER THE INDO-UK DTAA AND LOOKING TO THE FACTS OF T HE CASE, I AM UNABLE TO HOLD THAT IN CARRYING OUT LOCATION SPECIAL SERVICE S, THE APPELLANT WAS MAKING AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL ET C. THE AMOUNT RECEIVED BY THE APPELLANT IN THIS REGARD IS FOR MAKING AND PRODUCI NG THE TELEVISION FILM AND NOT FOR MAKING AVAILABLE ANY TECHNICAL KNOW-HOW, SKILL ETC. I, THEREFORE, HOLD THAT THE IMPUGNED AMOUNT OF ` 12,71,822/- RECEIVED TOWARDS LOCATION SPECIAL SERVICES BY THE APPELLANT CANNOT BE BROUGHT T O TAX AS FEES FOR TECHNICAL SERVICES UNDER THE INDO-UK DTAA. SUCH RECE IPTS DEFINITELY CONSTITUTE BUSINESS INCOME. HOWEVER, THE SAME WILL NOT BE LIABLE TO TAX IN INDIA FOR THE REASON THAT THE APPELLANT DOES NOT HAVE A PE TO WHOM SUCH ACTIVITIES CAN BE ATTRIBUTED IN INDIA. THE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE APPELLANT. 6.3 AS FAR AS THE FINDING OF THE COMMISSIONER OF IN COME TAX(APPEALS) TO THE EXTENT OF TREATING THE AMOUNT FOR FEE FOR TECHNICA L SERVICES UNDER THE PROVISIONS OF SEC. 9(A)(VII)(B) R.W EXPLANATION 2 AND FURTHER TH E FINDING THAT THE AMOUNT RECEIVED ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 10 BY THE ASSESSEE IS FOR MAKING AVAILABLE TELEVISION FILM AND NOT FOR ANY TECHNICAL KNOW-HOW, SKILL ETC., ARE CONTRARY TO EACH OTHER AT LEAST ON THE POINT OF FEE FOR TECHNICAL SERVICES. FURTHER, THE COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN A FINDING ON THE BASIS OF SUBMISSIONS OF THE ASSESSEE WITHOUT EXAMINATION OF ANY RELEVANT RECORD AS THE SAME WAS NOT PRODUCED BY THE ASSESSEE. EVEN BEFORE US, THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTS. 6.4 SINCE THE NATURE OF SERVICES HAS TO BE ASCERTA INED ONLY AFTER EXAMINATION OF THE RELEVANT RECORD AND THE LEGAL POINT, WHICH HAS BEEN SETTLED BY THE VARIOUS DECISIONS IS ONLY ON THE POINT OF MAKING AVAILABLE OF TECHNICAL KNOW-HOW, KNOWLEDGE, EXPERTISE ETC. WHICH IS AGAIN TO BE SEEN FROM THE FACTS THAT WHETHER ANY TECHNICAL SERVICE IS MADE AVAILABLE OR NOT. THUS, IN THE ABSENCE OF RELEVANT MATERIAL AND PARTICULARLY AGREEMENT BETWEEN THE PARTIES UNDE R WHICH THE ASSESSEE HAS RENDERED THE SERVICES AND RECEIVED THE PAYMENT, IT IS NOT POSSIBLE TO DETERMINE THE REAL NATURE OF THE ACTIVITY CARRIED OUT/SERVICES RE NDERED BY THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOM E TAX(APPEALS) AND REMIT THE ISSUE TO HIS FILE FOR DECIDING THE SAME AFRESH AFTE R CONSIDERING THE RELEVANT MATERIAL IN SUPPORT OF THE FACTS WHETHER THE SERVICES RENDERED BY THE ASSESSEE FALLS UNDER THE CATEGORY OF TECHNICAL SERVICES AND FURTHER MAKIN G AVAILABLE THE SAME AS CONTEMPLATED UNDER ARTICLE 13 OF THE INDO-UN TREATY . 7 GROUND NO.2 IS REGARDING LEVY OF INTEREST U/S 234 B/234C. 8 WE HAVE HEARD THE LD DR AS WELL AS THE LD SR COUN SEL AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOT E THAT THIS ISSUE IS COVERED BY THE DECISION IF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF DIRECTOR OF INCOME-TAX ITA NO.4034/M/2005 M/S REUTERS TELEVISION LTD 11 (INTERNATIONAL TAXATION) V. NGC NETWORK ASIA LLC RE PORTED IN 313 ITR 187. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 10 IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH ,DAY OF OCT 2012. SD/- SD/- ( R S SYAL ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH OCT 2012 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI