TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 708
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....The Hon'ble DRP has erred in confirming the action of the learned AO in passing the assessment order under section 143(3) read with section 144(C) of the Act. 2.3 The Hon'ble DRP and the learned AO have erred in holding that the income earned by the appellant is in nature of royalty under section 9(1)(vi) of the Income Tax Act,1961. 2.4 The learned AO has failed to appreciate that the payment made by a resident company to the appellant cannot be treated as royalty, as the students are only provided with the course material and the Indian company did not obtain the use or right to use the copyright or literary work. 2.5 The learned AO has erred in not appreciating the fact that the services provided by the appellant do not allow the Indian Company to enjoy any patent, trademark or copyright. Therefore, receipt from such services cannot be considered as royalty under section 9(1)(vi) of the Act. 2.6 The learned AO has erred in not appreciating that as the payer was not under an obligation to deduct tax at source and the income earned by appellant was also not chargeable to tax in India. 3 Grounds relating to treatment of income from distance education under pro....
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....The Ld.AO observed that the assessee while filing its ROI for AY 2016-17, declared, 'NIL' income and claimed the entire TDS amount of Rs. 40,70,116/- as refund. The Ld.AO called upon the assessee for information u/s 142(1) of the Act seeking reasons for filing 'NIL' return & claiming the said refund. The assessee in response submitted that since it is a Resident of Malaysia, it is eligible for the benefits of the India-Malaysia DTAA and it also doesn't have any PE in India, hence the amount of Rs. 3.59 Crores is not taxable in India. 2.3 The Ld.AO noted that the assessee during the course of assessment proceeding for AY 2013-14 (being the earlier AY) had submitted that, there does not exist any formal agreement with the Client Companies for the provision of the abovementioned services. Accordingly, a Notice u/s 133(6) of the Act, was issued to ABMC, being one of the Indian Companies, seeking details of any formal agreement on the basis of which it had remitted the service fee amounts to the assessee in that FY. In reply, ABMC mentioned that there was no such agreement and it had remitted the amounts to the assessee "as per the terms of agreement". On being further asked to cla....
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....he Ld.AO thus assessed the income in the hands of the assessee at Rs.3,59,11,128/-. On receipt of the DRP directions, assessee filed objections before the DRP. 3. The DRP after considering the submissions of the assessee, observed and held as under: 4. On receipt of the DRP directions, the Ld.AO passed the final assessment order by making the addition in the hands of the assessee as proposed by the Ld.AO in the draft assessment order. Aggrieved by the order of Ld.AO, the non-resident assessee is in appeal before this Tribunal. 4.1 The Ld.AR submitted that the subscription fee received by the assessee from Indian customer for providing access to the database is not in the nature of royalty, either under the Act or under the India-Malaysia DTAA. He submitted that the subscription fees received by the assessee are in the nature of business income. However, in the absence of a PE in India, the amount received is not taxable as per the provisions of India- Malaysia DTAA. 4.2 Ld.AR submitted that, the assessee being a tax resident of Malayasia has to be governed under the India-Malaysia DTAA. He submitted, the definition of royalty under Article-12 of the India-Malaysia is narrower....
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....lty have been annexed. 4.5 The Ld.DR also referred to agreement between assessee and Manipal Global Education Services Pvt. Ltd. that was engaged as a service provider to provide for marketing, business development and accounting services including student enrolment, student back office support services, collection of fees and remitting into and bursar activities. (collectively referred to as "Support Services") upon mutually agreed terms and conditions and other support activities that was carried out as per the agreement dated 05/08/2013. She also referred to page 256 of the paper book, wherein certain faculties were appointed by assessee in India, who delivered the courses through online modes to the students across nations, of the companies with whom assessee had an agreement. 4.6 The Ld.DR submitted that though in the said letter, it is mentioned that these consultants are not employees of the assessee, however this aspect needs to be verified. Referring to pages 192 to 325 of paper book, the Ld.DR submitted that all these documents were filed before the DRP and the Ld.AO did not get opportunity to verify the same. He thus prayed for the issue to be remanded to the Ld.AO for....