Secondment not Fee for Technical Services

The Delhi High Court upheld the Income Tax Appellate Tribunal's orders holding that cost-to-cost reimbursements made by Indian Ernst & Young entities to Ernst & Young U.S. LLP for seconded employees were not taxable as Fees for Technical Services (FTS) under either Section 9(1)(vii) of the Income-tax Act or Article 12 of the India–USA DTAA. 

The Court also held that receipts from professional services rendered from the United States qualified for exemption under Article 12(5)(e) read with Article 15 of the DTAA. Consequently, all the Revenue's appeals were dismissed.