TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 36
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.... No. 6509/Del/2019 is the appeal by the assessee preferred against the order dated 14.06.2019 framed u/s. 143(3) r.w.s. 144C of the Act pertaining to A.Y. 2015-16. 3. Since common grievances are involved in the above mentioned appeals they were heard together and are disposed of by this common order for the sake of convenience and brevity. 4. The first common grievance relates to the proportionate disallowance of deduction claimed u/s. 80IA of the Act. 5. The underlying facts in the issue are that the assessee commenced providing telecommunication services from May, 2002. A deduction u/s. 80IA of the Act was claimed by the assessee on profits derived from telecommunication services. A.Y. 2007-08 was taken as the first of the 10 years out....
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....ssee. 11. Per contra the DR did not bring any distinguishing decision in favour of the revenue. 12. We have carefully considered the orders of the authorities below and have carefully perused the decision of this Tribunal in assessee's own case for A.Y. 2011-12. 13. We find force in the contention of the counsel. This Tribunal in A.Y. 2011-12 has resolved this quarrel in favour of the assessee. The relevant findings read as under:- 14. Since the factual matrix and the arguments are identical. Facts consider in A.Y. 2011-12, respectfully following the decision of the coordinate bench (supra) we direct the AO to delete the proportionate disallowances. 15. Ground No. 2 to 6 of A.Y. 2010-11, ground 2 to 2.5 for A.Y. 2013-14 and ground ....
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....eement ('DTAA'). 20. The CIT(A) was not convinced with the contention of the assessee and confirmed the disallowance. 21. Before us the counsel for the assessee drew our attention to the decision of this Tribunal in assessee's own case for A.Y. 2011-12 and pointed out that the Tribunal has decided the issue in favour of the assessee. 22. Per contra the DR though supported the findings of the lower authorities, but could not bring any distinguishing decision in favour of the revenue. 23. We have given a thoughtful consideration to the orders of the authorities below. We find force in the contention of the Counsel that this issue was considered by this Tribunal in assessee's own case for A.Y. 2011-12 and has decided in fav....
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....tly stated that payment for telecommunication services to DTO do not qualify as royalty in terms of section 9(1)(vi) of the Act. It is the say of the Counsel that as per the agreement between the assessee, Bharti Airtel and Reliance each party was responsible for its own network and for the provision of services related to it. 31. Strong reliance was placed on the decision of this Tribunal in the case of Bharti Airtel Limited 178 ETJ 708. 32. Per contra the DR strongly supported the findings of the AO. 33. We have given a thoughtful consideration to the orders of the authorities below. It is true that the agreement between the assessee, Bharti Airtel and Reliance clearly show that each party was responsible for its network and for the pr....
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.... basis and neither of the parties shall have any rights in the equipments or in the network of other parties The agreement are not for renting, hiring, letting or leasing out of any of the network elements or resources to the other parties or for rendering telecommunication services on a reciprocal basis ....The Assessee is nowhere concerned with the route, equipment, process or network elements used by the FTO in the course of rendering such sendees." "In the case of telecom industry, all the telecom operators have similar infrastructure and telecom networks in place, for rendition of telecommunication services. The process embedded in the networks of all telecom operators is the same. The equipments, resources etc. employed in the execu....
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.... as interconnecting telecom operators with the aid of their network and the process embedded therein. This is a standard facility which is used by the FTP itself. Thus the insertion of Explanation 6 to Section 9(1)(vi) does not alter the decision taken by us on this issue." "56. Is far as the insertion of Explanation 5 to Section 9(1)(vi) is concerned, we hold that this Explanation comes into play only in case of Royalty falling within the ambit of Section 2 of Section 9(1)(vi). When a process is widely available in the public domain and is not exclusively owned by anyone the it cannot constitute an item of intellectual property for the purpose of charge of 'Royalty' under clauses (i), (ii) and (iii) of Explanation 2 to Section 9(....