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2020 (10) TMI 604 - AT - Income TaxIncome accrued in India - amount received from Indian customers for the provisions of bandwidth services outside India - whether equipment/process royalty under section 9(1)(vi) of the Act read with Article 12(3) of the India Singapore Tax Treaty - As per assessee mere receipt of service using equipment under the control, possession and operation of service provider would only be transaction of a service and not to “use or right to use” an equipment, and would not attract ‘Royalty’ under the Act or the Tax Treaty - HELD THAT:- Where the Tax Treaty between India Singapore specifically does not include “transmission by satellite, cable, optic fiber or similar technology” in the definition of ‘Royalty’ under the Tax Treaty and also where the Tax Treaty had not undergone any amendment, the provisions of DTAA being more beneficial to the assessee are attracted and the assessee is not liable to be taxed on the amount received from Indian customers for the provision of bandwidth services outside India. There is no merit in the orders passed by the authorities below and the same are reversed. The assessee company is a tax resident of Singapore, which is providing band width services to the various Indian Telecom Operators like Bharti Airtel in India and the services are being provided outside India and the consideration received by the assessee company is not taxable as ‘Royalty’ in view of the beneficial provisions of DTAA between India and Singapore under which the definition of ‘Royalty’ has not been amended. Thus, Ground of appeal Nos. 1 & 2 raised by the assessee are allowed.
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