TMI Blog2022 (5) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of India-USA DTAA. Decided in favour of assessee. Addition on account of subscription to published reports and customized reports - miscellaneous services rendered to third party clients - HELD THAT:- As decided in assessee own case [ 2022 (4) TMI 1062 - ITAT DELHI] assessee does not grant the right to use the copyright. Hence, consideration (subscription fee) received by the assessee is not taxable as royalty under the provisions of Article 12(3) of the India-USA DTAA. Similarly in customized research advisory services the assessee is providing only advisory services through emails or presentations. The output of custom research advisory is not provided through subscription mode or data base access mode and, therefore, the question of access to data base does not arise at all. Further there is no transfer of any copy right to the customers - thus considerations received by the assessee towards customized research advisory services are not taxable under the head Royalty. This ground of appeal is allowed. However, in Assessment Year 2014-15, we find that the Assessing Officer has made addition of Rs. 3,85,10,715/- and the ld. CIT(A) having noted that the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of software royalty and, therefore, the decision of the Tribunal should not be followed. 6. We have given thoughtful consideration to the orders of the authorities below. The first common grievance relates to the addition on account of management fee amounting to Rs. 21,43,248/- in A.Y 2013-14 and Rs. 24,90,375/- in A.Y. 2014-15. 7. A perusal of the order of the ld. CIT(A) shows that while confirming the findings of the Assessing Officer, he has followed the findings given by his predecessor in Assessment Year 2011-12. We have carefully perused the decision of the Tribunal in ITA No. 6137/DEL/2015 in Assessment Year 2011-12. This Tribunal, at Para 9.4 of its order has considered this issue and decided as under: 9.4 Now coming to the facts of the present appeal, the assesee has rendered management support services of the description listed at Annexure C of Master Support Services Agreement to Everest India on independent and non-exclusive basis. These services are centralized services which are being provided to all group entities in order to maintain uniformity and ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT rationalize and standardize the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 'managerial services' is outside the ambit of 'fee for technical services', then the question of the Petitioner having to deduct tax at source from payment for the managerial services, would not arise. It is, therefore, not necessary for the Court to further examine the second part of the definition, viz., whether any of the services envisaged under Article 13(4) of the Indo-UK DTAA are made available to the Petitioner by the DTAA with France. 9.6 The assesee's case also finds support from the MOU annexed to the India-USA DTAA explaining the FIS wherein it is clarified that clause 4(b) of Article 12 excludes any service that does not make technology available to the person acquiring the service. Memorandum of Understanding (MOU) annexed to the India- USA DTAA dated 15.05.1989 concerning FIS states as under: ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT Article 12 includes only certain technical and consultancy services. But technical services, we mean in this context services requiring expertise in a technology. By consultancy services, we mean in this context advisory services. The categories of technical a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , chemical, civil, electrical, mechanical, metallurgical, and industrial engineering) ; 2. Architectural services ; and ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT 3. Computer software development. Under paragraph 4(b), technical and consultancy services could make technology available in a variety of settings, activities and industries. Such services may, for examples, relate to any of the following areas : 1. Bio-technical services ; 2. Food processing ; 3. Environmental and ecological services ; 4. Communication through satellite or otherwise ; 5. Energy conservation ; 6. Exploration or exploitation of mineral oil or natural gas ; 7. Geological surveys ; 8. Scientific services ; and 9. Technical training. From the above, it is evident that none of the services provided by the assesee are in the nature of FIS. 9.7 Further, considering the services provided by the assesee (listed above), in our view, these are not technical services nor do they require any technological knowledge, skill or experience. There is no transfer of technology involved. Everest India is not enab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublished report. The subscription material can be used by subscriber for business purpose only by and among subscriber's employees. The ownership of and the copyright to subscription material as well as the database remains vested in assessee, the subscriber cannot copy, reproduce, distribute, republish, display, post, or transmit in any form or by any means any of the subscription material or alter, modify, or change, the subscription material without the prior written permission of the assesee. Subscriber is permitted to use subscription material without alteration of factual content and properly attribute the name of assessee as the source of such information. Further, subscriber is legally bound to give copyright notice and bound not to remove and reproduce and include all copyright notices or confidential or proprietary legends in and all copies of subscription materials. Subscription to online database is same as purchasing online industry specific newsletters, journals, books, magazines. In substance, the transaction is that of purchase and sale of published report. The client gets access to view a particular published report subscribed by it and not to the full database ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siderations received by the assessee towards customized research ITA Nos. 2469, 6137/Del/2015 2355/Del/2017 Everest Global Inc. vs DDIT advisory services are not taxable under the head Royalty. This ground of appeal is allowed. 11. As mentioned elsewhere, the ld. DR has strongly opposed to the findings of this Tribunal in Assessment Year 2011-12 stating that in that year, this Tribunal has not considered that the decision relied upon was delivered in different contexts. We do not find any merit in this contention of the ld. DR. Therefore, we do not have any hesitation in following the order of the co-ordinate bench [supra]. 12. However, in Assessment Year 2014-15, we find that the Assessing Officer has made addition of Rs. 3,85,10,715/- and the ld. CIT(A) having noted that the facts are identical to Assessment Year 2011-12, upheld the addition to the extent of Rs. 3,73,67,894/-. However, the ld. CIT(A) has not given any finding to the addition of Rs. 11,42,821/- being sale of published reports and custom data set. Therefore, in the interest of justice and fair play, we restore this issue to the file of the ld. CIT(A) for limited purpose of adjudicating addition of Rs. 11,4 ..... 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