DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) Vs. SUN MICROSYSTEMS INDIA P. LTD.

JUDGEMENT

(1.) THE following substantial question of law would arise for consideration in this appeal:

(2.) THIS court had an occasion to consider this agreement in the case of CIT v. De Beers India Minerals P. Ltd. reported in : [2012] 346 ITR 467 (Karn), where, after referring to various provisions of law, it was held that the question, whether along with rendering technical services, whether the technical knowledge with which the services was rendered was also made available to the assessee/customers is purely a question of fact which is to be gathered from the terms of the contract, the nature of services undertaken and what has transmitted in the end after rendering technical services. If along with technical services rendered, if the service provider also makes available the technology which they used in rendering services, then it falls within the definition of "fees for technical services" as contained in the DTAA. However, if technology is not made available along with technical services what is rendered is only technical services and the technical knowledge is withheld, then such a technical service would not fall within the definition of "technical services" in the DTAA and the same is not liable to tax.