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2023 (11) TMI 1239 - AT - Income TaxIncome deemed to be agreed or arising in India - Revenue Characterization - FTS or Royalty or business income - payments received by assessee towards interconnectivity utility charges treated as Royalty since the payment is made to “use the process” or “an equipment” - HELD THAT:- Admittedly there is no treaty between India and Hong Kong, the country of which the assessee is a tax resident. Therefore the payment received by assessee has to be analysed under the Income Tax Act alone. We note that the decision relied by the Ld.AR in the following cases has analysed the taxability of the identical payment received by the assessee therein for similar services, under the provisions of Income Tax Act, having regards to section 9(1)(vi); Explanation 2, 5 and 6 also. And this Tribunal has held that payments made by an Indian telecom company for identical services, as rendered by the present assessee will not fall within the ambit of Royalty under section 9(1)(vi), Explanation 2,5 and 6. As per the decision of case of Vodafone Idea Ltd.[2023 (7) TMI 1164 - KARNATAKA HIGH COURT] we hold that the receipts in the hands of the assessee could be taxed as business profits as per the applicable laws of Hong Kong and cannot be brought to tax either as FTS or Royalty under the Income Tax Act in India. Decided in favour of assessee.
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