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2022 (2) TMI 313 - AT - Income TaxNature of payment in the light of the definition of “Royalty” - chargeability of amount received from MCPL by the Assessee towards BT charges for providing WAN connectivity/bandwidth services outside India as equipment/process royalty u/s 9(1)(vi) of the Act and/or Article 13(3) of the India UK DTAA - Assessee is a tax resident of UK - bandwidth services are provided as standard services wherein the customer enjoys an uninterrupted service to transmit voice and data at standard rate of reliability - diversified views - HELD THAT:- Applying the rule that if two interpretations are possible on tax liability benefit of interpretation is given to the subject, we follow the ruling of the Hon’ble Delhi High Court in the case of Asia Satellite[2011 (1) TMI 47 - DELHI HIGH COURT] and Bombay High Court in the case of Siemens Aktiongesellschaft[2008 (11) TMI 74 - BOMBAY HIGH COURT] and hold that in the case of Assessee, the consideration received for providing bandwidth facility will not be taxable as equipment royalty or process royalty. The plea of the Assessee in this regard is accepted and the relevant grounds of appeal in all the 7 appeals are allowed, as admitted by both the parties, the facts and circumstances of the case are identical. Taxable income in India - purchase of software - Indo-UK DTAA - HELD THAT:- Case of present Assessee falls within the third category analyzed by Hon'ble Supreme Court. Respectfully following the above view by Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [2021 (3) TMI 138 - SUPREME COURT] We hold that purchase of software in the present facts does not amount to give rise to any taxable income in India as the provisions of sec.9(1)(vi) along with Explanation- 2 or the relevant provisions of the Indo-UK DTAA are not applicable to present Assessee's. Accordingly, we allow the relevant ground of appeal.
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