TaxTMI 
TaxTMI 
2017 (11) TMI 1846
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....Rs. 1,49,59,032 On the facts and circumstances of the same and in law, the Ld. DCIT has erred in levying interest under Section 234B of the Act amounting to Rs. 1,49,59,032. If the income is treated as Business income, there shall be no tax payable by the Company. Consequentially, levy of interest would not be warranted. Without prejudice to above, the Ld. DDIT disregarded the fact that Appellant is a non-resident Company whose income is subjected to tax deduction at source and the Appellant has no liability to pay advance tax under section 209(l)(d) of the Act. Ground No. 3: - Initiation of penalty proceedings under section 271(1)(c) of the Act On the facts and circumstances of the case and in law, the Ld. DCIT has erred in initiating penalty proceedings under section 271(l)(c) of the Act. 3. None appeared on behalf of the assessee when the appeal was called out for hearing. We have heard the ld. Departmental Representative and perused the records. The ld. Departmental Representative submitted that the issues raised are identical with the assessee's own case for the Assessment year 2011-12 which has been decided by this Tribunal vide order dated 12.04....
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....income earned by it from selling the subscription of publications cannot be treated as "Royalty" but should be treated as "Business Income" which would not be chargeable to tax in the absence of Permanent Establishment ('PE') in India. The assessee argued that its publications are akin to a magazine that provides latest database, information, etc., relating to I.T. industry. However, unlike magazines, their publications are not circulated to the subscribers/customers in a printed form, but the same are circulated electronically via the internet, etc. to the subscribers/customers and although this made their publications a digital product, the subscription income arising to them could not be considered as "royalty" under Article 12(3) of the India-Ireland Tax Treaty since the publications are copyrighted and the subscribers do not get a right to exploit the underlying copyrights in the products/ publications. The assessee placed reliance on certain case laws and also made detailed submissions before the A.O. (which are incorporated in the draft assessment order) in support of its contention that the amount of Rs. 77,61,64,930/- was not taxable. 6. The Assessing Officer co....
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....ws:- "4. We have heard the rival submissions and perused the relevant material of record. At the very outset, the learned Departmental Representative relied on the judgement of the Hon'ble Karnataka High Court in the case of OT(IT) v, Wipro Limited [(2011) 203 Taxman 621 (Kar.)] and submitted that Wipro Limited, a customer of the present assessee made payment without deduction of tax at source u/s 195 of the Act. When the matter finally come up before the Hon'ble Karnataka \high Court, it was held that the payments made by Wipro Limited to Cartner for online use of database was for licence to use said database and hence the consideration was royalty, liable for deduction of tax at source u/s 195 of the Act. 5. The learned AR countered the submissions advanced on behalf of the Revenue by stating that the issue as to whether the payment should be considered as 'royalty' or 'business profits' is not free from doubt in view of the conflicting judgements rendered by the Hon'ble Karnataka High Court in the case of Wipro Limited (supra) and the Hon'ble Delhi High Court in the case of Ericsson A.B. [(2012) 204 Taxman 192\Dei)]. It was submi....
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....12.04.2017 has decided the same issue by holding as under: 3. Apropos ground no. 1 3.1 On this issue at the outset Ld. Counsel of the assessee submitted that the issue has been decided by this tribunal in assessee's own case against the assessee in ITA No. 7101/Mum/2010 vide order dated. July 24th, 2013. Operating portion of the tribunals order read as under: "The Hon'ble Karnataka High Court considered a case in which Wipro Limited made payment to the assessee and the same has been held to be in the nature of 'royalty', liable for deduction of tax at source u/s 195. The Hon'ble High Court noticed in the penultimate para of the judgment that: "the payment made by the respondent to M/s. Gartner, which is a non-resident company, would amount to 'royalty' and wherefore, there is a statutory obligation on the part of the respondent to make tax deduction ". The contrary view expressed by the Tribunal cannot be adopted in the case of the payee-assessee, when the Hon'ble Karnataka High Court has rendered judgment on tne very same transaction in the hands of the payers. If the argument tendered by the Ld. AR is accepted, it would a....
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....a by holding that: the assessee did not attract the provision of section 195 of the Act as the assessee was engaged to the very same business information reports imported by the assessee and no fault in the decision of Authority for Advance Ruling was pointed out. However, in the present case we find that assessee is not engaged in merely compiling business information reports but it is also engaging in to qualitative reports which cannot be said to be available from public domain. Hence it cannot be said that the facts of the two cases are identical. Hence since tribunal had decided the same issue in assessee's own case consistently against the assessee earlier and Hon'ble jurisdictional High Court is seized of the matter and has not reversed the same yet, following the precedent as above we decide the issue against the assessee. 9. Since facts are identical, respectfully following the precedent as above, we uphold the order of ld. CIT(A). 10. Apropos ground no.2: We find that this issue was decided by the tribunal in assessee's own case as referred above as under: 4.1 On this issue Ld. Counsel of the assessee submitted that the issue is squarely covered in favour....