Article 12(5) of the India-Netherlands DTAA governs the taxability of fees for services rendered.

Per George Mathan, JM

These two appeals are filed by the two different assessees arising out of the order passed by the ld.AO passed u/s.143(3) r.w.s.144C(13) of the Act, dated 22.01.2025 for the assessment year 2022-2023.

2. When the matter was called call upon for hearing, an adjournment application has been filed by Ms. Riya Shah, CA and appeared on the online mode was not in uniform. Consequently, as it is noticed that the adjournment application does not give valid reasons for the adjournment and as the counsel was not in uniform, the appeal is being heard ex-parte. 3. Ld.CIT-DR was requested to make his submissions and he vehemently supported the order of the ld.DRP.

4. We have considered the submissions of the ld.CIT-DR and perused the orders of the authorities below. The grounds of appeal raised in ITA No.543/Kol/2025 in the case of M/s Philips electronics Netherland B.V, reads as under :-

PHILIPS ELECTRONICS NEDERLAND B.V.

PAN: AAFCP4361F

Assessment Year: 2022-2023

Appeal to the Income-tax Appellate Tribunal against Order dated 28 January 2025 passed u/s. 143(3) r.w.s. 144C(13) of the Income- tax Act, 1961

GROUNDS OF APPEAL

Based on the facts and circumstances of the case, Philips Electronics Nederland B.V. (here-in-after referred to as 'PENBV/Appellant') respectfully craves leave to prefer an appeal against the order dated 28 January 2025 passed by the Assistant Commissioner of Income- tax (International Taxation)-2(1), Kolkata ('Ld. AO') on the following grounds:

1. Taxability of Fees for Information Technology Services received from group entities is bad in law and on facts

1.1 That on the facts and in the circumstances of the case, the Learned Assessing Officer ['Ld. AO'] and the Hon'ble Dispute Resolution Panel ['Hon'ble DRP'] have erred in treating the sum of Rs. 90,98,85,471 received by the appellant from its group entities in India towards rendition of Information Technology Services as taxable without appreciating the fact that the same ought not to be taxable under Article 12(5) of the Double Taxation Avoidance Agreement between India and Netherlands ('India-Netherlands DTAA') as the appellant do not 'make available' technical knowledge, skills, experience, etc.

1.2 That on the facts and in the circumstances of the case, the Ld. AO has erred in taxing. and the Hon'ble DRP has further erred in confirming such taxation of, the receipt of Rs. 90,98,85,471 towards rendition of Information Technology Services as income of the appellant without appreciating the favorable order of Hon'ble Kolkata Tribunal in the appellant's own case ( ITA No. 2241 of 2019 dated 15 September 2022 for AY 2015-16 and ITA No. 74 of 2021 dated 15 March 2023 for AY 2016-17) wherein services rendered under GSU agreement including information technology services was held as non-taxable in India.

1.3 That on the facts and in the circumstances of the case, the Ld. AO has erred in taxing. and the Hon'ble DRP has further erred in confirming such taxation of, the receipt of Rs. 90,98,85,471 towards rendition of Information Technology Services as income of the appellant without considering any of the supporting document/evidence submitted by the Appellant evidencing that the services rendered do not make available technical knowledge, experience, skill etc. to group companies.

2. Taxability of Fees for Design Services received from Philips India Limited is bad in law and on facts

2.1 That on the facts and in the circumstances of the case, the Learned Assessing Officer ['Ld. AO'] and the Hon'ble Dispute Resolution Panel ['Hon'ble DRP'] have erred in treating the sum of Rs. 3,51,94,430 received by the appellant from Philips India Limited towards r