TaxTMI 
TaxTMI 
2024 (6) TMI 145
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....of the Income Tax Act, 1961 (hereinafter referred as 'the Act'), by the ITO, National Faceless Assessment Centre, Delhi (hereinafter referred to as the Ld. AO). 2. Heard and perused the record. 3. The relevant facts are that the AO noted that the assessee company made Certain payments to its associated Enterprises (AEs) located outside India i.e. MCI International Inc (MCII), MIC Communications Service Ind. (MCICS) and Verizon Business Network Service Ind. (VBNSI) amounting to Rs. 26,43,90,632/-, Rs. 4,04,11,671/- and Rs. 1,04,25,78,180/- respectively. As regards the telecom payments made to MCII and MCICS, the AO noted that the said payments were in the nature of royalty u/s. 9(1 )(vi) of the Act and Article 12 of the India US Tax Treaty....
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....vered by the decision of the Hon'ble ITAT Delhi Bench passed in its own case for the AYrs. 2010-11 to 2015-16. The appellant has contended that ruling of Hon'ble Delhi High Court and Hon'ble Delhi Tribunal are binding on lower authorities and the AO should have considered the decisions rendered by the Jurisdictional Court, rather than referring to the decision of the Hon'ble Madras High Court in the case of Verizon Communication Singapore Pvt. Ltd (supra), facts of which are not applicable to the assessee's case. The appellant had stressed that payment for Telecommunication Service made to MCICS and MCII do not qualify as Royalty and to support its case, the appellant had placed reliance upon various judicial precedents. Further by placing ....
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.... Act. Subsequently, similar issue further came up for adjudication before the Hon'ble Delhi ITAT 'D' Bench in appellant's own case for AYrs. 2013-14, 2015-16 & 2010-11. The Hon'ble ITAT Delhi 'D' Bench vide their common order dated 20-10-2021 in ITA No. 7297/Del/2017, 6509/Del/2019 & 2234/2019 decided the issue in favour of the assessee following the earlier decision of coordinate Bench passed for the AY 2011-12. 5.1 As with regard to payment amounting to Rs. 104,25,78,180/- to Verizon Business Network Service Ind. (fellow subsidiary) which assessee had claimed as payment being made for business support service. The CIT(A) had held as follows; "9. I have considered the facts of the case, assessment order and appellant's written submissio....
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.... of the Hon'ble Delhi Tribunal in Appellant's own case for AY 2010-11, 2011-12, 2013- 14 and AY 2015-16 wherein the Hon'ble Delhi Tribunal held that these payments are not in the nature of 'Royalty'. Considering the facts of the case and appellant's submissions, I am inclined to agree with the appellant's claim. In the instant case, while making the addition of Rs. 1,04,25,78,180/- on account of disallowance u/s. 40(a)(i) by holding payment made by the assessee to VBSNI as 'Royalty' under section 9(1)(vi) of the Act, the AO simply stated that similar payments were made by the assessee company to MCI Communication Service in earlier years and disallowances u/s 40(a)(i) of the Act were made. When the AO himself equated the pay....