2025 (5) TMI 1881

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.... of. ITA 148/2025 and CM APPL. 29106/2025 (Exemption) 3. The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 [the Act] impugning an order dated 05.08.2024 passed by the Income Tax Appellate Tribunal [ITAT] in ITA No. 3250/Del/2023 in respect of Assessment Year [AY] 2021-22. 4. The respondent [Assessee] - a tax resident of the Republic of Ireland - has preferred the said appeal impugning an order dated 19.09.2023 passed by the Assessing Officer [AO] under Section 143 (3) read with Section 144C (13) of the Act. 5. One of the controversies involved in the present appeal is regarding subscription payments received by the Assessee for providing cloud services. Whereas the Revenue claims that the sa....

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....oyalty, but business receipts and in the absence of PE in India, they are not taxable under the India-Ireland Double Taxation Avoidance Agreement (DTAA). However, the Assessing Officer was not convinced with the submissions of the assessee and proceeded to assess subscription receipts as royalty income both under the Act as well as under the treaty provisions and accordingly, framed draft assessment orders. Learned DRP also upheld the decision of the Assessing Officer. 4. Learned counsel for the assessee submitted that the issue is squarely covered by the decision of Hon'ble Delhi High Court in case of CIT vs. MOL Corporation vs. DCIT in ITA No. 99/2023-order dated 16.02.2023. He further relied upon the decision of coordinate Bench....

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....anges in the factual matrix or the legal proposition. Therefore, following the earlier decisions, the learned ITAT had allowed the Assessee's appeal. 8. The Revenue has preferred the present appeal projecting the following questions for consideration of this court: "A. Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in holding that the subscription payments received towards Cloud Services by the Assessee is not taxable as Royalty income within the meaning of Article 12 (3) of the India-Ireland DTAA as well as section 9 (1) (vi) of the Income Tax Act,1961? B. Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in holding that the payments received by the ass....