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TMI Blog2019 (12) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO u/s143(3) read with section 144C(13) of the Income Tax Act (for short The Act) pertaining to the assessment year 2016-17. 2. The brief facts of the case are that the assessee filed its return of income for the assessment year under consideration declaring nil income. The AO determined the income of the assessee at Rs. 879,938,280/- pursuance to the directions dated 05.07.2019 issued by the Dispute Resolution Panel (DRP) confirming the addition made on account of revenues from subscription to data base (CAS) division and subscription revenues for journals (PUBS division). The assessee has challenged the impugned order before the Tribunal vide ITA No. 6952/MUM/2019 which is yet to be heard and decided. 3. In the light of the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 21.08.2019 passed by the ITAT, Mumbai in assessee's case ITA No. 5928/Mum/2018 for the AY 2015-16 by following the decision of the Mumbai Tribunal rendered in assessee's own case ITA No. 6811/Mum/2017 for the AY 2014-15, vide which the Tribunal has decided the identical issues in favour of the assessee. 6. On the other hand, the Ld. DR supported the impugned order passed by the AO in pursuance to the directions of the Ld. DRP. The Ld. DR further submitted that the authorities below have passed the order in question on the basis of the facts and circumstances of the present case, however, did not point out any material change in the facts of the present case. 7. We have heard the rival submissions of the parties and also g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re access to that work or permission touse the work cannot imply that the payer is paying for use or right TO use the copyright. In other words, when no copyright is acquired by the payee, question of using it or getting a right to use it does not arise. 12.In the present context, we may also examine the issue from another angle as follows. The transfer of a copyrighted right means that the recipient has a right to commercially exploit the database/software, e.g. reproduce, duplicate or sub-license the same; such payments may be classified as royalty, but factually speaking in the present no such rights in database or search tools (SciFinder or STN are acquired by the customers, as is evident from the terms of the sample agreement of CAS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the fewer authorities oil the issue in dispute. We find that issue with respect to the PUBS division coincides with the issues on the CAS fee The journal provided by the PUBS division do not provide any information arising from assesse's previous expedience. The assessed experience ties in the creation of/maintaining such m format! an online. By granting access to the journals, the assessee neither shares its experiences, techniques or methodology employed in evolving databases with the users, nor imparts any information relating to them. As is clearly evident from the sample agreements, all that the customers get is the right to search, view and display the articles (whether online or by taking a print] and reproducing or exploiting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a copyrighted product and accordingly the consideration paid is not royalty, but for purchase of a product, in the instant case too, what is acquired by the customer is a copyrighted article, copyrights of which continue to lie with assessee for all purposes. It is a well settled law that copyrighted article is different from a copyright and that consideration for the former i.e. a copyrighted articles does not qualify as royalties. 19. Thus, the principles noted by us in the earlier part of this order in the context of the income earned by way of CAS fee are squarely applicable to the subscription revenue received from customers of PUBS division for sale of journal also, and accordingly PUBS fee also does not qualify as 'Royalty' in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-16 by following the decision of the coordinate Bench for the AY 2014-15. Since, the grounds of appeal raised by the assessee are covered in favour of the assessee by the decision of the coordinate Bench and since there is no change of facts in the present case, we hold that the impugned order is not in accordance with the decision of the coordinate Bench. Hence, respectfully following the orders of the coordinate Benches discussed above allow the appeal of the assessee. 9. Ground No. 3 relates to alternative plea that the AO erred in determining tax payable on the assessed income @ 15% instead of 10% (with applicable surcharge and cess) as per the beneficial provisions of the Act. Since, we have allowed Ground No. 1 and 2 holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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