2023 (1) TMI 1173

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....oth the parties. Case files perused. 2. It transpires at the outset that the Revenue's former "lead" appeal ITA No.838/PUN/2022 for A.Y. 2018-19 raises the following substantive grounds: "(a) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in treating the amount of Rs.99,20,61,868/- as non taxable in India, on the ground that the services were rendered outside India, without appreciating the facts that the assessee had failed to fulfill all conditions as laid down in clause (b) of section 9(1)(vi) of the I. T. Act, 1961. (b) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in treating the FTS received by the assessee from Infosys Ltd. being not accrued or ar....

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....the Ld.CIT(A) has erred in treating the FIS received by the assessee from Infosys Ltd, being not accrued or arose in India, without appreciating the fact that, the assessee had fulfilled all the conditions as enumerated in clause (b) of Article 12(4) of India-USA DTAA. 3. The appellant craves leave to add to, alter, amend, modify or withdraw all or any of the above ground(s) of appeal either at the time of the hearing or before the-hearing of this appeal." 3. Both the learned representatives next invited our attention to the CIT(A)'s detailed discussion reversing the Assessing Officer's action holding the sum of Rs.68,72,13,090/- as taxable in assessee's hand as follows. "3.3 I have carefully considered the submission of the appella....

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.... provision of services to its customer i.e McDonalds. These services by its very nature can only be provided/utilized/ availed only where Colocation facilities/infrastructure is situated (which is in Philadelphia 1500 Spring Garden, 19130) Thus Infosys is availing and utilizing the services of the Appellant in USA, to earn income from its customer i.e. McDonald's located in USA (i.e. from a source outside India). Infosys has availed the services from the Appellant for in turn rendering services to its customer outside India and hence the source of income lies outside India. In view of the same, Appellant's case falls within the ambit of exception provided under clause (b) to Section 9(1)(vii) of the Act and income earned by the Appell....

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....me u/s. 9(1)(vii) read with Sec. 9(2) Explanation that mere absence of payee/assessee's permanent establishment "PE" in India would not be fatal to the Revenue's cause. He also quoted this tribunal's co-ordinate bench order in Groupo Antolin Irausa SA V/s. DDIT ITA NO. 1442/PN/2017 that assessee's services rendered to M/s. Wipro Ltd. in USA give rise to its taxability in India only. 5. We find no merit in Revenue's instant arguments. This is for the precise reason that the assessee herein ; M/s. Sungard Availability Services LLP (a USA based entity) had entered into a service agreement with the payer M/s. Wipro Ltd.(Indian Company) providing the impugned services through the latter's group company in USA to M/s. McDonald's Corporation(US....