Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (11) TMI 1744 - AT - Income TaxIncome taxable in India - sum received by the assessee from the Indian customers - to be taxed as ‘royalty’ in India or not? - assessee company is engaged in the business of providing international communication network connectivity/ facility to various telecom operators around the world and earned revenue from the Indian customers, mainly from providing the “Voice Services” outside India - as per AO assessee not mainly providing standard facility but it is actively providing the usage of its typical hardware and software proprietary product to facilitate and leverage the core business of its customers. Thus, the usage of such facilities amounts to usage of actual proprietary rights - HELD THAT:- As decided in assessee own case [2016 (4) TMI 520 - ITAT MUMBAI] in the AY 2009-10 merely because the provision of the service may require technical input by the person providing the service, it cannot be said that technical knowledge, skills, etc. are made available to the person purchasing the service. As to what are the connotations of 'making the technology available to the recipient of technical services', as is appropriately summed up in protocol to Indo-US DTAA, "generally speaking, technology will be considered 'made available' when the person acquiring the service is enabled to apply the technology." In the case before us, no services are made available in the sense that the recipient of service is enabled to apply the technology, and do the same work without recourse to the service provider. There is no transfer of technology here, and in that sense technical services are not made available. The authorities below were in error in holding that the receipts from Indian entities on account of connectivity charges, are taxable in India. We direct the Assessing Officer to delete the same - Decided in favour of assessee.
|