2023 (1) TMI 891

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....ertaining to assessment years 2015-16 and 2017-18 respectively in pursuance to the directions of learned Dispute Resolution Panel (DRP). ITA No.7462/Del/2018 for AY: 2015-16 2. In ground nos. 1 to 5, the assessee has raised the common issue of taxability of an amount of Rs.7,27,33,773/- received from sale of licence to various Indian customers as royalty under Article 12(3) of Indian - USA Double Taxation Avoidance Agreement (DTAA). 3. Briefly the facts are, the assessee, a non-resident corporate entity is a tax resident of United States of America (USA), hence, governed under India - USA DTAA. As observed by Assessing Officer, the assessee is a multi-channel application development platform provider having over 350 customers spread in ....

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....12(3) of India - USA DTAA. Learned DRP, while dealing with assessee's objections on the issue, upheld the decision of the Assessing Officer. 5. Before us, learned counsel appearing for the assessee submitted that the issue is squarely covered by the decision of the Tribunal in assessee's own case in assessment year 2014-15. 6. Though, learned Departmental Representative agreed with the aforesaid submission of the assessee, however, he strongly relied upon the observations of the Assessing Officer and learned DRP. 7. We have considered rival submissions and perused materials on record. It is evident, the assessee had entered into End User Licence Agreement (EULA) with customers in India in terms of which the assessee has granted licence t....

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....above proposition. 8. Accordingly, respectfully following the precedent from Hon'ble Apex Court and duly taking note that Revenue has not disputed that the facts in this case are not identical, we set aside the order of the Revenue authorities and decide the issue in favour of the assessee." 8. There is no dispute that factually the issue stands on the same footing as assessment year 2014-15. Therefore, respectfully following the decision of the Coordinate Bench in assessee's own case, as referred to above, we hold that the receipt in dispute is not in the nature of royalty, hence, not taxable in India. The Assessing Officer is directed to delete the addition. These grounds are allowed. 9. In ground no. 6, the assessee has challenged ....

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....rought to tax under Article 12(4)(a) of the tax treaty. Therefore, it has to be seen, whether it can come within the purview of Article 12(4)(b) of the tax treaty. As could be seen, to be considered as FIS under Article 12(4)(b) under the tax treaty, the make available condition has to be satisfied. In the facts of the present appeal, the Departmental Authorities have failed to demonstrate that while rendering the services, the assessee had made available technical knowledge, experience, skills, knowhow etc. to the recipient of such services. That being the case, the amount received cannot be treated as FIS under Article 12(4)(b) of the tax treaty. 11. In any case of the matter, the entire case of the revenue is, the amount received falls ....