Honda Motorcycle India’s ₹10.84 Crore FTS Payment to Asian Honda: ITAT Remands to Determine Taxability & P.E. under India–Thailand DTAA Due to Missing Documents [Read Order]
ITAT remands Asian Honda’s appeal involving ₹10.84 crore FTS from Honda Motorcycle India, directing DRP to reassess taxability and existence of PE under India–Thailand DTAA after noting key service documents were missing.
![Honda Motorcycle India’s ₹10.84 Crore FTS Payment to Asian Honda: ITAT Remands to Determine Taxability & P.E. under India–Thailand DTAA Due to Missing Documents [Read Order]](https://images.taxscan.in/h-upload/2025/07/09/2062038-honda-motor-taxscan.webp "Honda Motorcycle India’s ₹10.84 Crore FTS Payment to Asian Honda: ITAT Remands to Determine Taxability & P.E. under India–Thailand DTAA Due to Missing Documents [Read Order]")
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the appeal of Asian Honda Motor Co. Ltd. and remanded the matter to the Dispute Resolution Panel (DRP), after noticing that relevant documents to determine the taxability of ₹10.84 crore in Fees for Technical Service (FTS) receipts were not placed on record. Asian Honda, a Thailand-based non-resident company...
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the appeal of Asian Honda Motor Co. Ltd. and remanded the matter to the Dispute Resolution Panel (DRP), after noticing that relevant documents to determine the taxability of ₹10.84 crore in Fees for Technical Service (FTS) receipts were not placed on record.
Asian Honda, a Thailand-based non-resident company is engaged in the business of sale of cars, spare parts etc. It is responsible for exporting Honda motorcycles, automobiles, power products and components manufactured to over 80 countries around the world.
The appellant had received ₹10,84,21,790 from Honda Motorcycle and Scooter India Pvt. Ltd. (HMSI) for services rendered including infrastructure fees, IT services, software services, and license fees.
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The assessee claimed that the payments were business receipts not chargeable to tax in India due to the absence of a Permanent Establishment (PE). The Assessing Officer taxed the receipts under Article 22 of the India–Thailand Double Taxation Avoidance Agreement (DTAA), stating that the services were not directly connected with the assessee’s business.
The DRP upheld the Assessing Officer's view noting that certain key portions of the agreements, including annexures detailing the nature of services were not submitted by the assessee. As a result, it held that the receipts were taxable under Article 22 of the DTAA rather than as business profits under Article 7.
The Tribunal Bench comprising Madhumita Roy (Judicial Member) and Naveen Chandra (Accountant Member) found that the issue could not be conclusively determined in the absence of the relevant service agreements.
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Accordingly, the ITAT remitted the matter back to the DRP for fresh adjudication after examining all relevant documents and directed the assessee to place the documents. The DRP was also instructed to dispose of the case within eight months from the date of the Tribunal’s order and pass an order strictly per law after affording the assessee an opportunity to be heard.
The appellant was represented by Kamal Sawhney along with Nikhil Agarwal while Vijay B Vasanta represented the respondent.
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