Royalty characterization of service and platform receipts rejected under the Income-tax Act and India-Singapore treaty.

Receipts from infrastructure data centre charges, CRM development charges, other service charges, management service fees and member login fees were not taxable as royalty under section 9(1)(vi) of the Income-tax Act or Article 12 of the India-Singapore DTAA. The ITAT followed earlier coordinate bench rulings in the assessee's own case, finding the relevant facts identical and noting that no new material or change in law justified a different view. The additions made on this basis were therefore deleted in favour of the assessee.

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Issues: Whether the receipts comprising infrastructure data centre charges, trade and consumer CRM development charges, other service charges, management service fees, and member login fees were taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the India-Singapore DTAA.

Analysis: The receipts were held to be covered by earlier coordinate bench decisions in the assessee's own case. The facts for the year under consideration were found to be identical, and no new material or change in law was shown to warrant a different view. The Tribunal followed the consistent earlier view that the impugned receipts did not amount to royalty under the Act or the treaty.

Conclusion: The receipts were held to be not taxable as royalty, and the additions made on this account were directed to be deleted in favour of the assessee.

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