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TMI Blog2024 (3) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. 2. Brief facts of the case are as follows: Assessee is a foreign company incorporated under the laws of Hong Kong. Assessee is a telecom operator and provides telecommunication services. During the Financial Year relevant to Assessment Year 2011-12, assessee company had received charges from M/s. Vodafone South Ltd., (VSL) towards provision of telecom interconnect facilities to the tune of Rs. 17,17,935/-. The DCIT (International Taxation) issued notice under section 148 of the Act on 30.03.2018. The notice under section 148 of the Act was issued to bring to tax the telecom interconnect charges received by the assessee from VSL. The assessee objected to the proposed reassessment notice. However, the objections of the assessee were reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of Vodafone Idea Ltd., Vs. DDIT in ITA No.160 of 2015 (order dated 14.07.2023). 5. The learned DR was unable to controvert the assertions made by the learned AR. 6. We have heard the rival submissions and perused the material on record. The solitary issue is with regard to the payment received from Vodafone Idea Ltd., for interconnect usage charges, whether it is liable to be taxed as "royalty" under section 9(1)(vi) of the Act. The AO/DRP had brought the amount to tax in the hands of the assessee company solely relying on the orders passed under sections 201 and 201A in the case of the payer. The orders passed by the Tribunal in the case of the payer viz., VSL which was in favour of the Revenue has been reversed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Analysis, the Apex Court has held that Explanation 4 to Section 9(1)(vi) of the Act is not clarificatory of the position as on 01.06.1976 and in fact expands that position to include what is stated therein vide Finance Act, 2012. 20. The Explanation 5 and 6 to Section 9(1)(vi) of the Act has been inserted with effect from 01.06.1976. This aspect has also been considered in Engineering Analysis holding that the question has been answered by two Latin Maxims, lex no cogit ad impossibilia i.e. the law does not demand the impossible, and impotentia excusat legem i.e. when there is disability that makes it impossible to obey the law, the alleged disobedience of law is excused and it is held in Engineering Analysis as follows: "85. It is thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e NTOs have no presence in India. Assessee's contract is with Belgacom, a Belgium entity which had made certain arrangement with Omantel for utilisation of bandwidth. In substance, Belgacom has permitted utilisation of a portion of the bandwidth which it has acquired from Omantel. It is also not in dispute that the facilities are situated outside India and the agreement is with a Belgium entity which does not have any presence in India. Therefore, the Tax authorities in India shall have no jurisdiction to bring to tax the income arising from extraterritorial source." 7. The following orders of the Tribunal are also in sync with the above judgment of the Hon'ble jurisdictional High Court wherein it has been held that the interconnect ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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