What ingredients are required for services to be assessable as "fees for technical services" u/s 9(1)(vii)

Adidas Sourcing Limited vs. ADIT (ITAT Delhi)

To constitute “fees for technical services”, it is necessary that some sort of ‘managerial’, ‘technical’ or ‘consultancy’ services should have been rendered in consideration. The terms ‘managerial’, ‘technical’ or ‘consultancy’ do not find a definition in the Income-tax Act, 1961 and need to be interpreted based on their understanding in common parlance. Services rendered under a Buying Services Agency agreement are routine services offering procurement assistance. They consist of negotiating between the Principal and the manufacturers for purchase of merchandise. The fees for such services does not constitute "fees for technical services" u/s 9(1)(vii).