Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1129 - AT - Income TaxValidity of direction of the Dispute Resolution Panel (DRP) u/s 144C - Levy of interest u/s 234B - Failure to deduct tax (TDS) on part of person making payment to assessee - subscription revenue received by the Appellant - whether in the nature of Royalty - The AO further observed that though it has been held that assessee is having a PE in India, but the income is not computed as provided under Article 13(6) of the India-UK treaty as the assessee has disputed the existence of PE itself. - providing services through its server located at Geneva. Held that:- ITAT in earlier decision has decided that, that subscription charges received by the assessee from its customers in India is in the nature of royalty. The ITAT, further held that once the receipt in question has been decided as royalty in nature then there is no need to go into the question of assessee having PE in India and applying Article 13(6) of the India-UK Tax Treaty to determine the income attributable in India. The facts remained unchanged. The assessee failed to bring on record any evidence to prove that the finding of facts recorded by the ITAT for earlier year is incorrect. Therefore considering the facts and circumstances and also respectfully following the decision of the ITAT in assessee’s own case for earlier years, we are of the considered view that subscription charges received by the assessee from the customers in India is in the nature of royalty. Article 13(6) can be pressed into service only in the case when the existence of PE of non-resident is not in dispute. In this case the assessee has contended before the lower authorities that it does not have any PE in India and under these facts and circumstances the provisions of Article 13(6) cannot be invoked in the case when the receipt is found as royalty. Levy of interest u/s 234B - Held that:- when a duty is cast on the payer to deduct tax at source, on failure of the payer to do so, no interest can be imposed on the payee under Section 234B of the Act. The appeals filed by Revenue as well as the assessee are dismissed.
|