AZB & Partners represented Tungsten Automation England Limited (“Tungsten”) before the Delhi High Court in an Income Tax Appeal against a recently passed cryptic order of the Income Tax Appellate Tribunal (“Tribunal”). In December 2024, the Tribunal had held the business receipts of Tungsten from Genpact India Pvt. Ltd. (“GIPL”), for provision of an e-invoicing license, as taxable in India, as Fees for Technical Services (“FTS”)/ Other Income. Further, the Tribunal had also held that since the said receipts accrued and arose in India, the same were taxable in India under the domestic law. In less than 8 months, the Delhi High Court reversed the conclusions reached at by the Tribunal and by way of a detailed judgment discussing entire jurisprudence around FTS, concluded that receipts by Tungsten are business receipts, not liable to be taxed in India in the absence of a Permannet Establishment of Tungsten in India. Significantly, the Delhi High Court observed that since the service recipient, i.e., GIPL, was not granted any right to technology or source code of the software, which could enable it to absorb the technology and independently exploit the same, the services rendered by service provider, i.e., Tungsten, did not satisfy the FTS definition…”