TaxTMI 
TaxTMI 
2024 (3) TMI 1258
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....he case and in law, the Ld. AO has erred in assessing the total income of the Appellant under section 143(3) read with section 144C(13) of the Act at INR 1,37,25,62,534 as against the returned income of Nil. 2. That on the facts and circumstances of the case and in law, the Ld. AO/ Dispute Resolution Panel ("DRP") have erred in holding that the receipts from Indian customers are chargeable to tax as royalty in terms of Article 12(3) of India-US Double Tax Avoidance Agreement ("DTAA") and under section 9(1)(vi) of the Act. 2.1 That on the facts and in the circumstances of the case and in law, the Ld. AO/ DRP have erred in holding that the subscription charges received under Chemical Abstract Service (CAS) division and Publications (PUBS) division would be chargeable to tax in India under India-US DTAA being received for use or right to use of copyright in artistic, literary or scientific work and / or for use of information concerning industrial, commercial or scientific experience and / or for use of industrial, commercial or scientific equipment. 2.2 That on the facts and circumstances of the case and in law, the Ld. AO/ DRP have erred in holding that th....
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....ions division produces 51 scholarly journals including prestigious journal of the American Chemical Society, as well as weekly trade magazine Chemical & Engineering News. The assesse filed return of income for the assessment year under consideration on 09.03.2022 disclosing a total income of Rs. 2,89,46,950/-. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 27.06.2022. After considering the various submission of the assessee, the assessing officer passed draft assessment order u/s 143(3) r.w.s 144C(1) of the Act on 17.12.2022 and held that assessee had received payment for providing following product/services from outside India to Indian customers: 1. Fee for providing access (by subscription) to online chemistry databases (CAS division) Rs. 88,27,92,099 2. Subscription revenue from sale of online journals (PUBS division) Rs. 46,08,23,489 3. Subscription revenue from membership of M & SA division Rs. 33,27,724 4. Advertising revenues Rs. 2,46,371 The AO also stated that similar receipts were also scrutinised for the assessment year 2014-15 to 2020-21 and the AO has treated such receipts except members....
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....the direction of the DRP for the earlier years dismissed the objection filed by the assessee for the reason that revenue has not accepted the decision of the ITAT for earlier years and has filed appeal in Bombay High Court against the same. The Assessing Officer passed final assessment order under section 143(3) read with section 144(13) in pursuance to the directions of the Dispute Resolution Panel by making the impugned additions as discussed supra in this order. 4. During the course of appellate proceedings before us the ld. counsel submitted that similar issue on identical fact in the case of the ITAT has been decided by the ITAT, Mumbai in favour of the assessee and referred the following such decisions: 1. Tribunal's order in assessee's own case for A.Y. 2014-15 (2019) 106 taxmann.com 253(Mumbai) 2. Tribunal's order in assessee's own case for A.Y. 2015-16 in ITA No.5928/Mum/2018 3. Tribunal's order in assessee's own case for A.Y. 2016-17 in ITA No.6952/Mum/2019 4. Tribunal's order in assessee's own case for A.Y. 2017-198 in ITA No.1030/Mum/2021 5. Tribunal's order in assessee's own case for A.Ys. 2018-19 & 2019-20 (2019) 106 tax....
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....ed in India. The relevant operating part of the decision is reproduced as under: "7. We have heard the rival submissions of the parties and also gone through the material on record. The assessee has challenged the action of the AO/Ld. DRP in holding that the subscription charges received under Chemical Abstract Services (CAS) division and publications (PUBS) division would be chargeable to tax in India under India US DTAA being received for use of copyright of artistic, literary or scientific work and /or for use of information concerning industrial, commercial or scientific experience and/ or for use of industrial, commercial or scientific equipment. As pointed out by the Ld. counsel for the assessee, the coordinate Bench has decided the identical issue in favour of the assessee by following the decision of the coordinate Bench rendered in the assessee's own case for the AY 2014-15. The findings of the coordinate Bench in ITA No. 5928/Mum/2018 for the AY 2015-16 read as under:- "The appeal for the A.Y. 2014-15 has since been decided by the Tribunal (ITA No. 6811/Mum/2017, dated 30.04.2019). The relevant paras of the order are as under:- 11. With respect ....
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....the Indian Customers with respect to the subscription fees for CAS cannot be taxed as royalty as per section 9(1) (v) of the Act as well as Article 12(3) of the India USA DTAA. Thus, assessee succeeds on this issue................ 17. We have heard the rival submissions and perused the relevant material on record including the order of the fewer authorities oil the issue in dispute. We find that issue with respect to the PUBS division coincides with the issues on the CAS fee The journal provided by the PUBS division do not provide any information arising from assessee's previous expedience. The assessed experience ties in the creation of/maintaining such m format! an online. By granting access to the journals, the assessee neither shares its experiences, techniques or methodology employed in evolving databases with the users, nor imparts any information relating to them. As is clearly evident from the sample agreements, all that the customers get is the right to search, view and display the articles (whether online or by taking a print] and reproducing or exploiting the same in any manner other than for personal use strictly prohibited. Further, the customers do not get an....
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....stead of 15% as prescribed in Article 12(2) of India-USA DTAA. Since we have allowed Ground No. 2 of the appeal holding that the income of the assessee is not liable to be taxed in India, therefore, this Ground of appeal is rendered academic." 8. We notice that in the assessment year 2014-15, the assessee filed its return of income declaring nil income on the plea that it was a tax resident of USA and entitled to be taxed in accordance with the provisions of India USA Double Taxation Avoidance Agreement (DTAA) to the extent they are more beneficial. The AO however, taxed the income earned by the assessee from Indian customers with respect to the subscription fees for Chemical Abstracts Services (CAS) division and (PUBS) Division as royalty in terms of section 9(1) (vi) of the Act as well as Article 12(3) of the India USA DTAA. The contention of the assessee was that these incomes constitute business profits which are not taxable in the absence of any permanent establishment (PE) in India and since the services were being provided from outside India. The coordinate Bench decided both the issues in favour of the assessee. The coordinate Bench has decided the identical issues....