TaxTMI 
TaxTMI 
2024 (5) TMI 1593
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation. 3. In ground nos. 2 to 6 the assessee has challenged the addition of receipts from Customer Relationship Management ('CRM') Services as Fee for Technical Services ('FTS'), both under the provisions of the Income-tax Act, 1961 as well as under India-Singapore Double Taxation Avoidance Agreement ('DTAA'). 3.1 Briefly stated the facts are, the assessee is a non-resident corporate entity, incorporated under the laws of Singapore and is a tax resident of Singapore. As stated by the Assessing Officer, the assessee is engaged in providing CRM services to its customers/subscribers in various countries including India, which enables them to systematically record, store and act upon business data and to help businesses manage customer accounts, track sales leads, evaluate marketing campaigns and provide better post-sales service. The services provided enable customers to generate reports and summaries of their data and share such data with authorized individuals across functional areas. The assessee provides such services through internet. It is stated, the assessee does not have any data centre or business premises of its own in India. 3.2 Be that as it may, for providing CR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ver, he relied on the observations of the Assessing Officer. 3.6 We have considered rival submissions and perused materials on record. We have also examined the orders passed by the Tribunal and the Hon'ble Jurisdictional High Court while dealing with the issue in assessee's case for earlier assessment years. The factual matrix reveals that whether the receipts from CRM services is taxable or not as royalty/ FTS, is a legacy issue between the assessee and the Department starting from assessment year 2010-11 onwards. While deciding the appeals of the assessee on identical issue in assessment year 2010-11 to 2016-17, the Tribunal in ITA no. 4915/Del/2016 and others, dated 25.03.2022, has held that the receipts from CRM services cannot be treated as royalty. Similar view was reiterated by the Tribunal while deciding assessee's appeal for assessment year 2017-18 in ITA no. 316/Del/2021 dated 30.08.2022. Pertinently, against the aforesaid decisions of the Tribunal, Revenue went in appeal before the Hon'ble Jurisdictional High Court. While deciding the issue for assessment years 2010-11 to 2017-18, in a consolidated order passed in ITA 144/2023 and others dated 14.02.2024 the Hon'ble ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e software. This would clearly not fall within the ambit of Article 12(4)(b) of the DTAA. 15. In any event, clauses (a), (b) and (c) are factors which must be found to exist in addition to the consideration for service being relatable to the provision of managerial, technical or consultancy services. This is clearly evident from Article 12 (4) using the expression "if such services....". However, once we have found that the principal conditions spelt out in Article 12(4) are themselves not satisfied, this issue would pale into insignificance. 16. Before parting, we deem it expedient to notice Explanation 4 to Section 9(1)(vi) of the Act which reads as follows:- "Explanation 4. For the removal of doubts, it is hereby clarified that the transfer of all or any rights in respect of any right, property or information includes and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which such right is transferred." 17. It becomes pertinent to observe that Explanation 4 in essence introduces a deeming fiction and includes transfer of all or any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies and perused the materials on record. It is the case of the assessee that without granting refund due as per return of income the Assessing Officer has erroneously levied interest u/s 244A of the Act. In this context learned counsel for the assessee submitted that rectification application filed by the assessee is still pending before the Assessing Officer. 6.2 Considering the nature of dispute, we direct the Assessing Officer to factually verify assessee's claim and accordingly decide the validity of levy of interest u/s 244A of the Act. 7. Ground no. 10 being premature at this stage is dismissed. 8. Appeal is partly allowed. ITA No. 1924/Del/2022 (assessment year 2019-20): 9. Ground no. 1 is general in nature, hence requires no specific adjudication. 10. In ground nos. 2 to 6 the assessee has challenged the taxability of receipts from CRM services as FTS. 10.1 The issue raised in these grounds is identical to the issue raised in grounds 2 to 6 of ITA no. 1923/Del/2022, decided by us in earlier part of this order. Therefore, our decision therein would apply mutatis mutandis to these grounds as well. Grounds are allowed. 11. In ground no. 7 the assessee h....