HIRERIGHT LLC, UNITED STATES OF AMERICA Vs. DCIT, GURUGRAM

Parties Involved

Facts Summary

The case involves the assessment of revenue receipts derived by HireRight LLC from providing background scrutiny services. The Department of Income Tax (DCIT) held that these receipts should be treated as royalty and thus taxable in India. HireRight LLC contested this, arguing that the receipts should be classified as fees for technical services under the India-UK Double Taxation Avoidance Agreement (DTAA). The services provided by HireRight LLC involve verifying the information concerning various candidates proposed to be hired by its clients, such as educational qualifications and past employment details. The reports generated are delivered to clients in physical or online mode. The issue is whether these receipts qualify as 'royalty' under Article 13 of the India-UK DTAA.…

Legal Issues

• 1. Whether the receipts from background scrutiny services qualify as 'royalty' under Article 13 of the India-UK DTAA.
• 2. Whether the services provided involve imparting commercial experience, skill, or expertise.
• 3. Whether the receipts should be characterized as fees for technical services (FTS) under Article 13(4) of the India-UK DTAA.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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