TMI Blog2019 (12) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed its return of income declaring nil income on the plea that it was a tax resident of USA and entitled to be taxed in accordance with the provisions of India USA Double Taxation Avoidance Agreement (DTAA) to the extent they are more beneficial. The AO however, taxed the income earned by the assessee from Indian customers with respect to the subscription fees for Chemical Abstracts Services (CAS) division and (PUBS) Division as royalty in terms of section 9(1) (vi) of the Act as well as Article 12(3) of the India USA DTAA. The contention of the assessee was that these incomes constitute business profits which are not taxable in the absence of any permanent establishment (PE) in India and since the services were being pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 which is yet to be heard and decided. 3. In the light of the aforesaid background, the Ld. counsel submitted that the issues involved in the present case are covered in favour of the assessee by the decision of the ITAT, Mumbai in assessee s own case ITA No. 6811/Mum/2017 for the AY 2014-15 and ITA No. 5928/Mum/2018 for the AY 2015-16. The Ld. counsel further pointed out that the Ld. DRP has confirmed the additions in question by following the DRP directions passed in assessee s case for the AY 2014-15 and 2015-16. Since, the ITAT has set aside the orders pertaining to both the years passed by the AO in pursuance of the DRP directions and decided the issues in favour of the assessee, the impugned order is liable to be set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the present case. 7. We have heard the rival submissions of the parties and also gone through the material on record. The assessee has challenged the action of the AO/Ld. DRP in holding that the subscription charges received under Chemical Abstract Services (CAS) division and publications (PUBS) division would be chargeable to tax in India under India US DTAA being received for use of copyright of artistic, literary or scientific work and /or for use of information concerning industrial, commercial or scientific experience and/ or for use of industrial, commercial or scientific equipment. As pointed out by the Ld. counsel for the assessee, the coordinate Bench has decided the identical issue in favour of the assessee by following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciFinder or STN are acquired by the customers, as is evident from the terms of the sample agreement of CAS customers. In our considered view, transfer of any right in 3 copyrighted article is an alogous to the rights acquired by the purchaser of a book. In the case of a book, the publisher of the hook grants the purchaser certain rights with respect to the use of the content of the book, which is copyrighted, but the purchaser of the book does not acquire the right to exploit the underlying copyright. When the purchaser reads the book, he only enjoys its contents. Similarly, the user of the copyrighted software docs not receive the right to exploit the copyright m the software; he only enjoys the product/benefits of the product in the norma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search, view and display the articles (whether online or by taking a print] and reproducing or exploiting thesame in any manner other than for personal use strictly prohibited. Further, the customers do not get any rights to the journal or articles therein. They can only view the article in the journal that they have subscribed to and cannot amend or replicate or reproduce the journals. Thus, the customers are only able to access journal/articles for personal use of the information No use or right to ruse in any copyright or any other intellectual property of any kind is provided by the assessee to its customers. Furthermore, the information resides on servers outside India, to which the customers have no right or access, nor do they posse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers of PUBS division for sale of journal also, and accordingly PUBS fee also does not qualify as Royalty in terms of section 9(1) )vi) of the Act as well as Article 12 (3) of the India-USA DTAA. 20. Ground No. 3 relates to alternative plea that the Assessing Officer erred in determining tax payable on the assessed income @ 20%, instead of 15% as prescribed in Article 12(2) of India-USA DTAA. Since we have allowed Ground No. 2 of the appeal holding that the income of the assessee is not liable to be taxed in India, therefore, this Ground of appeal is rendered academic. 8. We notice that in the assessment year 2014-15, the assessee filed its return of income declaring nil income on the plea that it was a tax resident of US ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
