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2022 (3) TMI 1509 - AT - Income TaxIncome deemed to accrue or arise in India - royalty receipt - subscription fee received by the assessee from Indian customer for providing access to the database - India-Malaysia DTAA - PE in India - assessee submitted that subscription fees received by the assessee are in the nature of business income - HELD THAT:- Payments towards all kind of information would not be in the nature of Royalty. To determine the exact nature of the payment, the type of information passed on, needs to be verified. A perusal of Article 12(3) shows that, it brings within the ambit of the definition of 'Royalty', payment made for use of, or the right to use any copyright of a literary, artistic, or scientific work. In our understanding Article 12(3) covers only those payments that allow a payer to use/acquire a right to use copyright in literary, artistic or scientific work are covered within the definition of 'Royalty'. Hon’ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd.[2021 (3) TMI 138 - SUPREME COURT] has analysed the provisions of Income tax Act vis-a-vis provisions of DTAA. AR produced the Master Service Agreement dated 01/04/2013 between EduNxt Global SDN BHD and Aditya Birla Management Corporation Ltd., we observe that this agreement has not been filed before the authorities below. The DRP categorically observed that except for the invoice, assessee did not produce any other relevant information. In the interest of justice it is appropriate to remit the issue in dispute to the file of the Ld.AO for deciding the comparability of these transactions in the light of the judgment of the Hon’ble Supreme Court in Engineering Analysis Centre of Excellence Private Limited (supra) and the decisions relied by the Ld.AR reproduced herein above. Accordingly, the issue in dispute is remitted to the Ld.AO for fresh decision with the above directions. Appeal of the assessee is partly allowed for statistical purposes.
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