TMI Blog2022 (10) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... ve intimated the same - We remit this issue back to the file of the AO to verify the claim of the assessee - Ground raised by the assessee is allowed for statistical purpose. - ITA No. 665/MUM/2022 - - - Dated:- 10-10-2022 - SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER For the Assessee : Shri Madhur Agarwal For the Revenue : Ms. Bharati Singh ORDER PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the assessee against directions of Learned Commissioner of Income Tax (DRP-1), Mumbai-1 [hereinafter in short Ld.DRP) ] dated 21.01.2022 for the A.Y. 2017-18 passed u/s. 144C(5) of the Income-tax Act, 1961 (in short Act ). 2. Brief facts of the case are, assessee is a company incorporated under the Laws of Switzerland and has its entire management and control in Switzerland. Assessee is a tax resident of Switzerland under the IndiaSwitzerland Tax Treaty ( Tax Treaty ). The Tax Residence Certificates issued by the Cantonal Tax Administration, Zug for the calendar year 2015 and 2016. Accordingly, the Company is eligible to take the recourse to the beneficial provisions of the Tax Treaty. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... access to the database to the Indian Customers, of selected details / characteristics of selected molecules and for the selected countries based on requirement of the Indian Customers. 3. The Company has during the Financial Year 2016-17 received an income of ₹.44,34,93,451/- as Subscription Income from its third party Indian Customers for online Subscription of IQVIA Reports on which taxes have been withheld at source by some of the Indian customers aggregating to ₹.1,67,30,090/. Assessing Officer issued notice dated 23.02.2021, the Company have been requested to show cause as to why the Subscription Income should not be taxable as Royalty as assessed in Company's own case in AYs 2013-14, 2014-15 and 2015-16 and AY 2016-17. In this regard, assessee submitted that the subscription income is in the nature of business income and is not in the nature of 'Royalty' under the Act as well the Tax Treaty and therefore not taxable in India. As mentioned above, assessee is resident of Switzerland, under Section 90(2) of the Act and accordingly governed by the beneficial provisions of the Tax Treaty as compared to the provisions of the Act, wherever applicable. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has also filed a rectification application with the AO for the above mistake apparent from the record. 3. In view of the above, the Ld. AO should be direct to grant TDS of Rs. 6,47.764 Ground No. 3-Levy of Interest under Section 234B of the Act of Rs.1,64,07,015 1. On the facts and circumstances of the case and in law, the levy of interest under Section 234B of the Act is consequential in nature and should be deleted once the relief as sought under Ground no. 1 and 2 is allowed to the Appellant . Ground No. 4-Levy of Interest under Section 234D of the Act of Rs. 4,02,390 1. On the facts and circumstances of the case and in law, the levy of interest under Section 234D of the Act is consequential in nature and should be deleted once the relief as sought under Ground no. 1 and 2 is allowed to the Appellant. 5. With regard to Ground No. 1, Ld. AR brought to our notice that the issue under consideration is already covered in favour of the assessee and he brought to our notice the first order passed by the Coordinate Bench for the A.Y. 2013-14 in ITA.No. 6445/M/2016 which is placed in Page No. 132 of the Paper Book. Further, he bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT Vs Wipro Ltd [(2011) 203 Taxman 621 (Kar)] and other judgments by the same Hon'ble High Court, which have been followed by a coordinate bench of this Tribunal as well, these receipts are required to be taxed as royalty under section 9(l)(vi) as also under article 12(3) of the Indo Swiss DTAA. The assessee is aggrieved and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We find that Hon'ble jurisdictional High Court, in the case of DIT Vs Dun and Breadstreet Information Services India Pvt Ltd[(2012) 20 taxmann.695 (Mum)] has, while approving and concurring with the approach of Authority for Advance Ruling in the case of this very assessee, observed as follows: The assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances in respect thereof without deducting tax at source. The Assessing Officer held that the assessee was liable to deduct tax at source and accordingly passed an order under section 195 read with section 201 of the Act. The appeal filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or authority concerned, has any branches etc. It also gives a rating of the company. The informations that are provided in a BIR are said to be publicly available; they are collected and complied by D B associates. A BIR is accessible by any subscriber on payment of requisite price with regular internet access for which no particular software or hardware is required. The applicant states that access to data base of the applicant is available to public at large at a price as in case of buying a book and it is not a pre-requisite, that BIR must be downloaded by DBIS only and in fact some clients, such as Expert credit guarantee corporation, in fact, access the server themselves to download BIR. The applicant does not have any server in India for the use of DBIS. Indeed the applicant has specifically averred that the copyright in the BIR would neither be licensed nor assigned to either the DBIS or the Indian customer. From these aspects it is clear that the aforementioned ruling of the Authority is distinguishable on facts. If a group of companies collects information about the historical places and places of interest for tourists in each country and all informations are maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable DTAA. 8. When the above position was brought to the notice of the learned Departmental Representative, he simply placed his reliance on the stand of the authorities below. He could not, however, neither point out any legally distinguishable features between the case before Hon'ble jurisdictional High Court visa-vis this case, nor any other reasons for not following the binding precedent from Hon'ble jurisdictional High Court. Once our Hon'ble jurisdictional High Court has expressed a view, it cannot be open for us to be swayed by a contrary view expressed by any other Hon'ble High Court. No decision from Hon'ble jurisdictional High Court, contrary to the above decision of Hon'ble jurisdictional High Court, was brought to our notice. 9. In view of the above discussions, as also bearing in mind entirety of the case, we delete the impugned addition of Rs 23,01,00,058 as royalty in the hands of the assessee. The assessee gets the relief accordingly. 10. No other issues were pressed before us. In any event, the other points raised in the appeal were in the nature of consequential levies. Once the main addition itself is deleted, all these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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