TaxTMI 
TaxTMI 
2010 (7) TMI 562
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....ndia and Ireland.... 2. The assessee in the present case is a company incorporated in the Republic of Ireland and is a resident of Ireland for tax purposes in terms of Article 4 of the DTAA entered into between India and Ireland. It is engaged in the business of distributing Gartner Group's research products in the form of subscriptions, both in Ireland and through its distributors in those territories where the Gartner Group does not have a local presence. The said subscription research products stated to consist of qualitative and quantitative research and analysis that clarifies decision making for Information Technology buyers, users and vendors and helps clients stay ahead of IT trends. Industry areas covered in such ....
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....wherein a similar subscription received by the assessee from WIPRO Ltd. under identical service agreement was held to be not chargeable to tax in India by the Tribunal after rejecting all the contentions raised on behalf of the Revenue in support of its stand that the said amount was chargeable to tax in India. It was noted by the A.O. in this context that all the arguments raised and discussed by him in the assessment order were also raised before the Tribunal in the case of WIPRO Ltd. (supra). He also noted that the Tribunal had allowed the appeal of the assessee holding that copy right must be literary, scientific or artistic nature which was not there and payment fell outside the royalty provisions. He, however, still did no....
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....s chargeable to tax in India by the Revenue and M/s WIPRO Ltd. which had paid such subscription to the assessee company was treated as "assessee in default" for failure to deduct the tax at source from the said payment. The Tribunal, however, rejected all the contentions raised on behalf of the assessee in support of its stand and held that the subscription paid by WIPRO Ltd. to the assessee company was not amenable for taxation in India in the hands of the assessee company. The reasons given by the Tribunal for coming to this conclusion as contained in held portion of the report are reproduced below:- "Held, allowing the appeal that these payments were towards obtaining market data and clients strategy details etc. ....
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....Consequently, the assessee had no obligation to deduct tax under section 195 of the Act. Therefore, the orders of the authorities below were cancelled and the tax liability under section 201(1) and interest levied under section 201(1A) both were deleted." 4. The decision rendered by the Tribunal in the case of WIPRO Ltd. (supra) thus was rendered in the context of similar subscription amount received by the assessee company from the Indian Clients under identical agreement and the same was squarely applicable in respect of subscription received by the assessee from other Indian clients under the similar service agreements during the year under consideration. As a matter of fact, as noted by the A.O. on page 33 of his....
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....rders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. It was also observed by the Hon'ble Supreme Court that if the order of an appellate authority is the subject matter of further appeal, that cannot furnish any ground for not following the same unless its operation has been suspended by a competent court. Hon'ble Supreme Court went on to say that if this healthy rule is not followed, the result will be not only undue harassment to assessees but chaos in the administration of tax laws. In the case of CIT vs. Ralson Industries Ltd. 207 CTR (SC) 201, Hon'ble Supreme Court reiterated this view by observing that when an order is passed by the higher authority, the lower authority is bound the....