2024 (12) TMI 1598 - HC - Income Tax

Income deemed to accrue or arise in India - payments received by the Assessee for providing Customer Relationship Management (CRM) Services - According to the Revenue the payment for the said services are chargeable to tax as fees for technical services under the Act as well as under the India-Singapore Double Taxation Avoidance Agreement (DTAA) - HELD THAT - Revenue states at the outset that the aforesaid questions are covered by the decision of this Court in assessee s own case for earlier assessment year - Commissioner of Income Tax Vs. Salesforce.com Singapore Pte. Ltd. 2024 (2) TMI 1396 - DELHI HIGH COURT wherein held that the consideration received by the assessee from various customers on account of licensing of Customer Relationship Management CRM software is not royalty income within the meaning of Article 12(3) of the India Singapore Double Taxation Avoidance Agreements DTAA thus decoding issue in favour of assessee. No substantial question arise for consideration of this Court.

Summary

The Delhi High Court, in an appeal under Section 260A of the Income Tax Act, 1961, dismissed the Revenue's challenge to the ITAT's order for AY 2018-19 concerning payments received by the Assessee for Customer Relationship Management (CRM) services. The Revenue contended these payments constituted "fees for technical services" under Explanation to section 9(1)(vii) of the Act and Article 12(4) of the India-Singapore DTAA, arguing that the CRM software and related training provided operational benefits and independent use to Indian customers. The ITAT, following precedent for earlier years, held the receipts were not taxable as fees for technical services. The Court relied on its earlier decision in Commissioner of Income Tax Vs. Salesforce.com Singapore Pte. Ltd. (2024) 465 ITR 257, concluding "no substantial question arise for consideration" and dismissed the appeal.