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2016 (10) TMI 1372 - ITAT MUMBAIIncome deemed to accrue or arise in India - ‘royalty’ received from the Indian entity - existence of PE in India - Income taxable in India either under the Income Tax Act or under India-USA DTAA - AO did not accept the claim of the assessee and assessed the royalty @ 15% under India-USA DTAA - HELD THAT:- The very issue of existence of PE in India has been considered by the Hon’ble ITAT. The income of the assessee company does not qualify for the definition of Royalty in term of income tax Act 1961. The AO himself has accepted in the assessment order that the income of the assessee cannot be taxed as Royalty. Once the income of the assessee company does not qualify under the definition of Royalty, the income has to be held as business income. The business income cannot be taxed in the absence of PE in India. We have seen that the Hon’ble ITAT has categorically held that the WBPIPL is not the PE of the assessee company. Thus, respectfully following the decision of the Hon’ble ITAT in the assessee’s own case [2011 (12) TMI 195 - ITAT MUMBAI] we are of the view that the income of the assessee is not taxable in India and we direct the AO to delete the addition proposed on this account - Decided in favour of assessee.
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