Shirt Overview of the issue and observation by  ITAT Pune judgement of  SANDVIK AB Vs DCIT(2021) 123 taxmann.com 160 was as under:

1. Article 12(4) of India – Portuguese DTAA: For the purposes of this Article “fees for included services” means payments of any kind, other than those mentioned in Articles 14 and 15 of this Convention, to any person in consideration of the rendering of any technical or consultancy services (including through the provisions of services of technical or other personnel) if such services:

(a)

(b) make available technical knowledge, experience, skill, know-how or processes or consist of the development and transfer of a technical plan or technical design which enables the person acquiring the services to apply the technology contained therein.”

2. The assessee was of the view that it has rendered managerial services, which is outside the purview of article 12 of India- Portuguese DTAA read with protocol of India-Sweden DTAA. (Article 12 as mentioned above talks about make available technical or consultancy services but not managerial services).

3. AO was in the view that benefit of India-Portuguese DTAA cannot be extended and receipt of training fees is in the nature of FTS, which has the effect of making available the knowledge to the recipients and hence chargeable to tax.

1. Rendering leadership training to employees of SAPL cannot be said as rendering managerial services.

2. As per Article 12, services rendered must not only be consultancy or technical in nature, but should also make available technical knowledge which could be used later on.

3. The leadership training provided by the assessee did not result in making available any technical services.

4.  In terms of Article 12 of DTAA between India and Portugal, training services are not a consideration for technical or consultancy services.