TMI Blog2021 (12) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court in the case of Union of India Vs. Azadi Bachao Andalon [ 2003 (10) TMI 5 - SUPREME COURT] . Accordingly, we will consider the beneficial provisions of the tax treaty to see whether the contention of the assessee that the alleged payment from DJCIPL is not royalty income. The payments made for acquiring right to use product itself, without allowing any right to use the copy right in the product are not covered with the scope of Royalty which may get covered under the term under Royalty as per the Act. The facts of the case in hand show that there is no transfer of legal title in the copyrighted article as the same rests with the assessee. All rights, title and interest in the licensed software which is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is for provision of accessing database of the assessee. Hence the same cannot be considered as Royalty under Article 12 of the India-US DTAA. We, therefore, set aside the findings of the Assessing Officer and direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee. - ITA No. 7364/DEL/2018 - - - Dated:- 14-12-2021 - Shri N.K. Billaiya, Accountant Member, And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Dhanesh Bafna, CA, Adv., Shri Hirali Desai, CA For the Department : Mrs. Anupama Anand, CIT- DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER: This appeal by the assessee is preferred against the order dated 12.09.2018 framed u/s 143(3)/144 r.w.s 144 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onours to kindly direct the Learned AO to drop/ abate the penalty proceedings and oblige. 3. The representatives of both the sides were heard at length, the case records carefully perused. 4. Briefly stated, the facts of the case are that the appellant company is a business corporation incorporated in USA and engaged in the business of providing information products and services containing global business and financial news to organizations worldwide. It offers information via newspapers, newswires, websites, applications, newsletters, magazines, proprietary databases, conferences and radio. 5. The appellant company appointed Dow Jones Consulting India Pvt Ltd [DJCIPL] on a principal to principal basis for distributing its product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Union of India Vs. Azadi Bachao Andalon 263 ITR 706. Accordingly, we will consider the beneficial provisions of the tax treaty to see whether the contention of the assessee that the alleged payment from DJCIPL is not royalty income. 11. As per Article 12 of the Tax Treaty, Royalty is defined as under: 10.1.4.1 (a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic, or scientific work, including cinematograph films or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta or to make any adaptation in the data. Further, the end user cannot be said to have acquired a copyright or right to use the copyright in the data and accordingly, the payments made by DJCIPL for accessing the database would not qualify as payments for the use of copyright. 10.1.7 The Applicant submits that the payments made by DJCIPL is not for the transfer of all or any rights in respect of the database Under the agreement, DJCIPL does not acquire any right in relation to the. products. 10.1.8 Thus in view of the above arguments, n shall be possible to conclude that the payment received by the Applicant cannot be treated as a consideration for the transfer of any 'copyright'. The transaction under consideration is tor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no authority to reproduce the date in any material form to make any translation in the date or to make adaptation in the data. 14. We further find that the end user cannot be said to have acquired a copy right or right to use the copy right in data. A perusal of the agreement with DJCIPL shows that DJCIPL does not acquire any right in relation to the products. In our considered view, in determining whether or not a payment is for use of copyright, it is important to distinguish between a payment for right to use the copy right in a program and right to use the program itself . 15. In the case in hand, the revenue derived by the assessee from granting limited access to its data base is akin to sale of book, wherein purchaser does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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