TMI Blog2020 (1) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... . Article 13(6) can be pressed into service only in the case when the existence of PE of non-resident is not in dispute. In this case the assessee has contended before the lower authorities that it does not have any PE in India and under these facts and circumstances the provisions of Article 13(6) cannot be invoked in the case when the receipt is found as royalty. When the issue has been decided by the Tribunal against the assessee in the preceding assessment years more than once and no difference in facts obtaining in the impugned assessment year has been brought to our notice by the assessee. Adhering to the norms of judicial discipline, we respectfully follow the decision of the Tribunal on the issue, as referred to above, and hold that the assessee cannot take the benefit of Article 13(6) of India UK Tax Treaty. Thus we hold that not only the subscription fee is in the nature of royalty but the provision of Article 13(6) of the Tax Treaty would not be applicable to the assessee. Accordingly, the grounds are dismissed. - ITA no.6384/Mum./2016 - - - Dated:- 30-12-2019 - Shri Saktijit Dey, Judicial Member And Shri Manoj Kumar Aggarwal, Accountant Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d perused the material on record. The first issue which arises is regarding the nature of subscription charges received by the assessee from the customers in India. While it is the claim of the assessee that it is not in the nature of royalty/fee for technical services and only a business profit, however, the Revenue has treated it as royalty. As could be seen from the facts on record, while deciding the dispute relating to nature of subscription charges received by the assessee in assessee s own case for the assessment years 2008 09 and 2009 10, the Tribunal in the decision reported in [2014] 47 taxmann.com 10 (Mum.) (Trib.), has held that the amount received by the assessee is in the nature of royalty as per Article 13(3) of the Tax Treaty. The same view was reiterated by the Tribunal wile deciding identical issue in assessee s own case for the assessment year 2012 13 in DCIT v/s Reuters Transaction Services Ltd., [2018] 96 taxmann.com 354. Therefore, in our considered opinion, the issue whether the amount received by the assessee from the customers in India is in the nature of royalty stands covered against the assessee by the aforesaid decisions of the Co o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 115A of the Act which is incorrect. The learned A.R., in response to a query from the Bench that is there any change in the facts during the current year when compared to the facts already considered by the Tribunal in the earlier years, fairly accepted that there is no change in the facts, but still reiterated his argument that once the assessee has not challenged existence of PE income shall be computed in accordance with the provisions of Article 13(6) of India-UK treaty and not under the provisions of the Income Tax Act. 16. However, even after taking note of the aforesaid submissions of the assessee, the Tribunal was not persuaded to accept it as it found that the decision rendered earlier in assessment years 2008 09 and 2009 10 are on identical facts and there is no difference in the factual position in the impugned assessment year. The same is the factual position in the impugned assessment year as well. The argument advanced by the assessee with regard to the applicability of Article 13(6) has already been dealt with by the Tribunal while deciding identical issue in assessee s own case for the assessment year 2012 13. The observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Service Contract with the Indian clients for providing the necessary equipments, connection facility, installation and support service in order to avail the foreign exchange deal matching system provided by the assessee. Thus the Indian clients could avail the services of the assessee only through the equipments and connectivity provided by the assessee itself through its Indian subsidiary namely RIPL. The fee for providing the services is charged by the assessee from the Indian subscribers and actual uses of telecommunication are paid to the RIPL. The assessee is remunerating the RIPL for the services of marketing and installation of the equipment on behalf of the assessee to its clients. Thus though the equipments and other installation and connectivity are installed and provided through RIPL but the charges for the entire services and facility are paid by the clients to the assessee and not to the RIPL. The Ld. Counsel has also submitted that it is an integrated service rendered to the clients from its server situated in Geneva, therefore, there is no control or possession of the Indian clients to use or right to use the server of the assessee situated outside India. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he broadcaster/T.V. Channels were paid for using the transponder capacity of satellite and not for using any information or data to be provided to Indian customers. In the case in hand the assessee is rendering the services of providing foreign exchange deal matching system. This system facilitates the Indian subscribers i.e. Banks to deal in the foreign exchange with the other counterparts who are ready for the transaction of purchase and sale of foreign currency. Thus the role of the deal matching system is to provide a platform where both purchaser and seller find the respective match for the intended transaction of purchase and sale. Therefore, the decision of Hon ble Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd (supra), is not applicable in the facts of the case and particularly when the said decision is based on the finding that the transponder capacity has only a media for uplinking and downlinking of signals of the broadcaster and TV operators to be transmitted to their customers without any manipulation for improvement, whereas in the case in hand, the assessee is providing not only media but also the necessary information and data which proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 5, of this Article, the term fees for technical services means payment of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services of a technical or other personnel) which: (a) are ancilliary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3(a) of this article is received; or (b) are ancially and subsidiary to the application or enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received; or (c) make available technical knowledge, experience, skill know-how or processes, or consist of the development and transfer of a technical plan or technical design. 13. The payment received by the assessee against the services rendered to the Indian Banks whether falls under the term royalty or fee for technical services has to be decided by considering the definition as provided under the treaty and the real nature of the service provided in terms of the various contracts entered into between the parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reuters Developer Partner Program (or any successor program) and signs the Retuers Trading Application Partner Agreement (or any successor agreement). 16. As per the Reuters license principles interactive features of the system includes messaging, chatroom, bulletin board or those that allow interactivity between the users. Hardware / software and related documentation supplied by the assessee s group concern also includes the assessee s Application Programming Interface (API). All the services are rendered by the assessee on the site /office of the subscriber as per the clause 2.1 and 2.1.1 of the business principles as under: 2.1 Usage rights for information We classify services containing information into families sharing common business terms, as follows 2.1.1 Individual Services (listed here) Individual services are user-based Services priced, postitioned and packaged for users. For as long as they take the relevant service, users can: a) View, manipulate and create Derived Data fron information for their individual use: b) Store i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... system of matching the request along with the computer and internal access to the clients constitute integrated commercial equipment which performs complex functions of processing the request, providing information and facilitates the transaction of purchase and sale of foreign exchange by matching the demand and supply. The platform of transacting the purchase and sale is commercial equipment allowed to be used by clients/ subscribers for commercial purposes. The payments made by Indian clients/subscribers to the Assessee for use and right to use of such equipment and information for processing their request of purchase and sale of foreign exchange constitute royalty. 17.1 The nature of service rendered by the assessee includes the information concerning commercial use by the subscriber. Further the entire system of the assessee including the equipments and connectivity facility is provided at the site of the subscriber. Therefore, the assessee is providing the service in the form of information and solution to the need of the subscribers by providing the matching party. The entire system along with the matching system and connectivity inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange amount to imparting of information concerning technical, industrial, commercial or scientific equipment work and payment made in this respect would constitute royalty. 18. As we have given the finding that the income received by the assessee from the Indian Banks is in the nature of royalty, therefore, the other issues of fee for technical services becomes academic and we do not propose to decide the same. Further, though the assessee has not raised any specific ground on the issue of PE, however, the Ld. Counsel for the assessee has submitted that even if the Indian subsidiary of the assessee constitute PE or otherwise the assessee has PE in India in that case para 6 of Article 13 of DTAA will apply and the royalty or fee for technical services is assessed to tax in terms of provisions of Article -7 or Article -15 of DTAA. We do not agree with the contention of the ld. Counsel for the Assessee because once the receipt in question has been decided as royalty in nature then there is no need to go into the question of assessee having PE in India. Para 6 of Article-13 can be pressed into service only in the case when the existence of PE of a non resident is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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