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2018 (4) TMI 1362 - AT - Income TaxIncome based on the nature of services rendered by assessee - article 12 of Indo USA DTAA - whether section 9(1)(v)(c) are not in the nature of royalties/fees for included services? - income incurred in India - Held that:- The decision of the coordinate bench in assessee‘s own case for AY 2000-01 to 2004-05, that royalty income of the appellant earned from OEMs situated outside India for the patents licensed to OEMS for manufacture of CDMA Network outside India we hold that same is not chargeable to tax u/s 9 (1) (vi)(c) of the ACT. As the revenue is not chargeable to tax in India as per Income tax Act 1961 requirement of looking at the provision of article 12 (7) of Indo USA DTAA is futile. Ground No 1 and 2 of the appeal of the assessee. Royalty from BREW operator agreement of ₹ 67848685/- and 15% thereof amounting to ₹ 10177303/- is not chargeable to tax in the hands of the assessee u/s 9(1)(vi) as well as Article 12 of the Indo-USA Tax Treaty. Ground No. 3 of the appeal of the assessee is allowed. The taxation of royalty in respect of the CDMA handsets and equipment and the addition in respect of invoicing the revenues under the BREW agreement thus stand deleted.
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