2023 (3) TMI 708 - AT - Income Tax

Income received or deemed to be received in India - royalty receipts - assessee is a non resident company incorporated in Malaysia. It is engaged in the business of provision of distant education courses to individuals for various post-graduation courses - HELD THAT:- A perusal of Article 12(3) shows that, it brings within the ambit of the definition of 'Royalty', payment made for use of, or the right to use any copyright of a literary, artistic, or scientific work. As in case of Engineering Analysis Centre of Excellence Pvt.Ltd. vs CIT [2021 (3) TMI 138 - SUPREME COURT] has analysed the provisions of Income tax Act vis-a-vis provisions of DTAA.

We note that the details that were filed before the DRP were neither remanded nor has been verified by the DRP themselves and observes that assessee could not furnish any documents which has been reproduced hereinabove in the preceding paras.

We note that the various agreements / documents that has been filed in piece meal before the AO and the DRP has not thoroughly verified the materials / document that were filed by the assessee. Infact before the DRP, various documents filed by the assessee has not been considered. As has been submitted by Ld.CIT.DR that identical issue has been remanded to the Ld.AO for fresh consideration for A.Y. 2014-15 [2022 (3) TMI 1509 - ITAT BANGALORE] we do not wish to express our opinion in the present facts as it would prejudice the rights of assessee as well as the revenue. In the interest of justice, we deem it proper to remand this issue back to Ld.AO to be decided along with A.Y. 2014- 15 as there are voluminous details available in the present assessment year under consideration before us.

It is appropriate to remit the issue in dispute to the file of the Ld.AO for deciding the comparability of these transactions in the light of the judgment of the Hon’ble Supreme Court in Engineering Analysis Centre of Excellence Private Limited (supra) and the decisions relied by the Ld.AR reproduced herein above. Accordingly, the issue in dispute is remitted to the Ld.AO for fresh decision with the above directions.

In the result the appeal of the assessee is partly allowed for statistical purposes.