TaxTMI 
TaxTMI 
2011 (10) TMI 473
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....as follows:- 2.1 On perusal of the details filed in respect of foreign remittances made by the respondent-assessee, it was noticed by the revenue that certain payments had been made by the assessee to a non-resident, M/s. Garner Group (hereinafter referred to as the 'M/s. Gartner'), U.S.A/Ireland, on which no tax was deducted under Section 195 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). It was found that the following payments had been made by the assessee during the period from 18.04.2000 to 02.12.2002: Date F.Yr Currency Amount (in Foreign Currency) Amount (in Rs.) 18.04.2000 2000-2001 USD 1666,66 72,533 10.08.2000 2000-2001 USD 2,16,166.67 97,16,691 17.11.2000 ....
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....ill not be covered by Section 9(l)(vi) as it would fall into the exception (b) under that Section and the payment is for the purposes of a business carried on outside India or for the purposes of making or earning any income from any source outside India. 2.2 The Assessing Officer held that the payments as referred to above made to M/s. Gartner was "royalty" within the meaning of explanation 2 to Section 9(l)(vi) of the Act and in the alternative "Fees for technical services" (included services), both of which are liable for tax in India in terms of Section 195 read with Section 9(l)(vi) and (vii) of the Income Tax Act and the relevant provisions of the DTAA, and accordingly, passed the order of assessment on 07/03/2003 and demanded amou....
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....ver, the respondent herein preferred I.T.A. Nos. 152/Bang/2004, 153/Bang/2004 and 154/Bang/2004 before the Tribunal. 2.4 The Tribunal, by order dated 30.12.2004, allowed the appeals filed by the respondent-assessee by holding that payment made by the respondent to M/s. Gartner did not constitute royalty as the same was in the nature of subscription made to the journal or magazine and no part of the copyright or copyright was transferred to the respondent and wherefore, the income was not chargeable to tax in India. Further, the Tribunal held that there was no obligation on the part of the respondent to deduct tax under Section 195(1) of the Act and accordingly, set aside the orders passed by the appellate authority and the Assessing Offi....
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....ned counsel appearing for the respondent. 4. The learned counsel appearing for the appellants-revenue submitted that the finding of the Tribunal is erroneous as the payment made by the respondent to M/s. Gartner is by way of royalty as what is granted to the respondent is a licence to have access to the database maintained by M/s, Gartner, which is a scientific, technical service and wherefore, there is transfer of copyright to the extent of having access to the database maintained by M/s. Gartner, which access, but for the licence would have been an infringement of copyright and copyright continued to be with M/s. Gartner and wherefore, payments made by the respondent amount to royalty and the same cannot be considered akin to subscript....
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....ction 201(1) and 201(1A) of the Act, Mere fact that in the instant case, the issue do not pertain to shrink wrapped software or off-the-shelf software and access to database maintained by M/s. Gartner is granted online, would not make any difference in the reasoning assigned by us to hold that such right to access would amount to transfer of right to use the copyright held by M/s. Gartner and the payment made by the respondent to M/s. Gartner in that behalf is for the licence to use the said database maintained by M/s. Gartner and such payment is to be treated as royalty'. Therefore, following the detailed reasons assigned by us in I.T.A. No. 2808/2005 and connected cases, we hold that the finding of the Tribunal that payment made by the re....