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M/s. Acronis Asia Pte. Ltd.,

7. Equalisation Levy (EL): The Applicant failed to provide adequate evidence of El payment. The claim that the levy was "in process" does not suffice to grant the exemption under sub- section 10(50). The Panel concludes that, without proof of EL payment, no exemption can be granted Further exemption of sub-section 10(50) is not relevant when the nature of income is Fees for Technical Services as in this case.

Finding:

The Panel concludes that the payments of Rs 8,16,73,828 are taxable as Fees for Technical Services (FTS) under Indian tax law The technical services were provided by the Switzerland entity, and Singapore's role was primarily that of an intermediary /marketing agent on paper The "make available"

M/s. Acronis Asia Pte. Ltd.,

41. Having held that the provisions of the India-Switzerland Double Taxation Avoidance Agreement cannot be invoked in the hands of the assessee, we now proceed to examine the taxability of the impugned distribution revenue strictly within the framework of the India-Singapore DTAA, which alone governs the present assessee.

42. Under the India-Singapore DTAA, fees for technical services are dealt with under Article 12(4) which has "make available" clause. It is an admitted position on record, and has been expressly recorded by the learned Dispute Resolution Panel in its directions, that the distribution revenue received by the assessee does not satisfy the "make available" condition prescribed under Article 12(4) of the India-Singapore DTAA. This finding is not incidental or peripheral; it goes to the very root of the matter. Once it is accepted that the assessee has not rendered any service which "makes available" technical knowledge, experience, skill, know-how or processes to the Indian sub-distributors, the characterisation of the receipts as fees for technical services under the India-Singapore DTAA stands conclusively ruled out. The treaty provision admits of no ambiguity in this regard. The relevant extract of Article 12(4) of the India- Singapore DTAA, along with the DRP‟s own admission on this aspect, is reproduced verbatim and is, therefore, consciously left to be incorporated hereunder:-

M/s. Acronis Asia Pte. Ltd.,

45. Nevertheless, since extensive arguments have been advanced on the applicability of section 9(1)(vii) of the Act, we proceed to examine the issue even on a without-prejudice basis under the domestic law.

46. Section 9(1)(vii) of the Act brings to tax income by way of fees for technical services if such services are rendered in India or are utilized in India. The judicial interpretation of this provision has consistently held that for a receipt to qualify as fees for technical services, there must be rendition of a service of a technical, managerial or consultancy nature to the payer, involving human intervention and application of specialised knowledge for the benefit of the recipient.

57. In view of our findings that the receipts do not constitute royalty or fees for technical services, the exclusion provided under section 10(50) of the Act squarely applies. Consequently, the distribution revenue is not liable to be included in the total income of the assessee. Accordingly, the addition made by the Assessing Officer, pursuant to the directions of the learned Dispute Resolution Panel, on account of alleged fees for technical services is hereby directed to be deleted in entirety.