TMI Blog2017 (5) TMI 1520X X X X Extracts X X X X X X X X Extracts X X X X ..... t in a case where assessee gets right to access “copyrighted material”, there is no dispute regarding the same to fall out of definition of term “Royalty”, under India Singapore DTAA. In this case, as assessee has only received access of copyrighted material, there is no dispute about payment falling out of definition of royalty. During course of hearing before us Ld. DR could not demonstrate as to how there was use of copyright and therefore, attempt to bring payments made under explanation 2 clause (iv) to section 9 (1) (vi) of the Act cannot be accepted. - Decided in favour of assessee. - ITA No. 407/Del/2013 - - - Dated:- 11-5-2017 - SH. N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER For The Appellant : Sh. Pouras Kaka, Sr. Adv. For The Respondent : Sh. Rajesh Kumar, Sr. DR ORDER PER BEENA A. PILLAI, J.M : 1. The present appeal has been filed by assessee against order dated 29.10.2012 passed by Ld. CIT(A)-XXIX, New Delhi, on following grounds of appeal: 1.1 The Learned Commissioner of Income Tax (Appeals)-XXIX, New Delhi (hereinafter referred to as CIT(A) ), has erred on facts and in law in holding that the payments m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... software (including data processing), rendering support services and acting as a back-office to its parent entity being Mc Kinsey and Co. Inc. It has been submitted by assessee that for the purpose of its business, assessee is required to access certain database, maintained by Thomson which provides general information on share price, market, commodity price, currency exchange rates etc. It was submitted that these are publicly available database which can be accessed by anyone, who is willing to subscribe to it. Ld. ITO observed that Thompson is a company incorporated in Singapore and is tax resident of Singapore, entitled to benefits under India Singapore Double Taxation Avoidance Agreement (DTAA). It was submitted that Thompson, neither renders any services in India nor has any place of business/office/personnel in India. 4. Before Ld. ITO, it was submitted that assessee entered into a master agreement no. 105337 with Thomson, wherein certain payments were to be made by assessee for accessing the database of Thomson. Certain clauses of agreements, for the sake of convenience are reproduced here with: 3. Use of the Service, Data and Software Product Client shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in such reports or presentations. 4. Leased Equipment The Leased Equipment rented to Client, is, and will remain the property of Thomson. Client will not part with possession or control of the Leased Equipment for purposes of installation, removal, maintenance, or repair during reasonable business hours. Client agrees not to move the Leased Equipment without giving Thomson no less than ten (10} days prior written notice. Client agrees not to use any apparatus or device, directly indirectly, with the Leased Equipment supplied without the prior written consent of Thomson. Client shall maintain the Leased Equipment in good working order subject to ordinary wear and tear and locate the Leased Equipment in an appropriate environment. Client agrees to insure the Leased Equipment in a sum equal to its replacement value under a commercial multi-peril policy or its equivalent. Client further agrees to furnish Thomson with a certificate of insurance evidencing such coverage. 5. Proprietary Rights Client agrees that the Services and the Software Product consist of factual information gathered, selected and arranged by Thomson, Third Party Data Suppliers, or Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anization, or use for its own benefit, any such Confidential information, both during the Service Term of this Agreement and thereafter. 4.3 As referred in the agreement, the service order is made between McKinsey omson and this reads as below: As per the Master agreement between Assessee and Thomsan Assis Pte. Ltd. the details regarding service received and value of such service are as under: NO OF REGIST ERED USERS UNIT PRICE DESCRIPTION (PACKAGE COMPONENTS ARE ATTACHED) DELIVERY PLATFORM PRODUCTS FEES (INDICATE ANNUAL OR MONTHLY] EQUIPMENT FEES THIRD PARTY FEE TOTAL CONTRAC T VALUE Please see below Data stream Advance Global Equiiies Economics Internet Annual $ 112.200 NA t/S/E/S Global Current Summary ana Global History Summary Data stream Annual $ 20,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides that services to be availed would be agreed upon between parties as per separate service orders, to be executed from time to time. Ld. Counsel referred to service order dated 23.11.2005 which is placed at page 6 to 8 of paper book. He submitted that as per service order burden of payment of taxes in India if any is on assessee. It is submitted that this is merely a subscription fee for accessing database of general, publicly available information, which, as per law is not liable to be taxed in India, and therefore, assessee made application under section 195 of the Act before TDS officer for nil withholding tax, which stood rejected. Ld. Counsel placed reliance upon or of decisions on identical issues decided by Hon ble jurisdictional High Court, other High Courts, and various co-ordinate benches of this Tribunal. 10. He further submitted that there is no transfer of any right in respect of copyrights by Thomson and it is a mere simple case of transfer of copyrighted article. Ld. Counsel submitted that in order to qualify payments made to Thomson as royalty, it is necessary to establish that there is a transfer of all or any rights (including the granting of any license) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and judicial precedent relied upon by Ld. Counsel. 14. To elucidate nature of transaction in the case of assessee, is necessary to examine some of clauses of master agreement entered into by assessee with Thompson, which has been reproduced hereinabove. On perusal of the agreement it is observed that Thomson provides general data relating to equity, share price, market, exchange rates, commodity prices etc which is publicly available. The database provided by Thomson to assessee is compilation Asian of general information, relating to share market which is neither relating to Thomson s own experience nor is it secret or divulged information. The payments made by assessee to Thomson are for merely accessing the database. With this access assessee has not received any knowledge as to how the databases are maintained nor does it have any licence for commercial exploitation of the Copyright with regard to the database maintained by Thomson. Assessee had claimed a limited right to use the information which is no doubt the copyrighted information solely belonging to Thomson under master agreement. Assessee is also not required to pay any third-party fee which is evident on reading o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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