2013 (11) TMI 1058 - HC - Income Tax

Bandwidth/Telecom Services outside India – internet sharing - whether the consideration paid for providing IPLC is towards service and not towards equipment; - Held that:- the receipts are liable to be treated as 'royalty' for the use of IPLC under Section 9(1)(vi) read with Explanation 2(iva) and correspondingly Article 12(3) of DTAA between India and Singapore. We also agree with the Tribunal that even if the payment is not treated as one for the use of the equipment, the use of the process was provided by the assessee, whereby through the assured bandwidth the customer is guaranteed the transmission of the data and voice. The fact that the bandwidth is shared with others, however, has to be seen in the light of the technology governing the operation of the process and this by itself does not take the assessee out of the scope of royalty. Thus the consideration being for the use and the right to use of the process, it is 'royalty' within the meaning of Clause (iii) of Explanation 2 to Section 9(1)(vi) of the Income Tax Act. – Decided against assessee.

Levy of interest u/s 234A, 234B, 234C where no TDS was deducted u/s 195 - Held that:- The Tribunal has not considered the grounds on the levy of interest under Section 234A 234B and 234D inspite of grounds raised therein. - matter remanded back on the issue of charging of interest.