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2023 (9) TMI 1158 - ITAT MUMBAIIncome taxable in India - cellular roaming charges - India-UK DTAA under Article 13(3) - Royalty - Assessee is a non-resident telecommunication service provider, primarily engaged in the business of providing mobile and broadband services along with various other ancillary services such as text, media messaging, games, music, video and data connections in the United Kingdom - AO held that the amount received by Assessee is covered within the scope of "process" and taxable as royalty under the Act as well as India-UK DTAA - HELD THAT:- Nowhere it has been elaborated by the ld. AO how the right to use process has been allowed by the assessee to VIL. It is a call connectivity services which has a standard process employed by various telecom operators around the world. In fact, VIL already possessed the process used for providing roaming services and used the same to provide services to customers in India, however, since VIL could not provide services to its customers who travelled to UK and it does not have any facility or infrastructure in UK and for this, even the arrangement with the assessee was made to provide services to its customers whenever they travel to UK. Thus, it cannot be held that the amount paid by VIL to the assessee falls within the scope and meaning of "royalty" u/s. 9(1)(vi). ITAT, Bangalore Bench in the case of group concern [2023 (9) TMI 280 - ITAT BANGALORE] had also dealt with the Explanation 5 & 6 to Section 9(1)(vi) and held that this definition cannot be read in to the DTAA which were in the nature and scope and held that it does not fall within the definition of Royalty as contained in Article 13(3) of India-Spain DTAA which is also applicable to India-UK DTAA. The Tribunal has also relied heavily upon the judgment of Vodafone Idea Ltd. [2023 (7) TMI 1164 - KARNATAKA HIGH COURT] which has reversed the judgment of Vodafone South [2015 (1) TMI 1018 - ITAT BANGALORE] which has been relied upon by the ld. AO. Thus, following the same reasoning, we hold that the amount received by the assessee from VIL in the form of roaming charges is not taxable. Accordingly, the same is delayed. In the result, on this ground, appeal of the assessee is treated as allowed.
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