TaxTMI 
TaxTMI 
2023 (3) TMI 1607
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....P) erred in concluding that the Subscription Income received by the Appellant for providing access to its online database of statistically compiled pharmaceutical data collected from public domain (IQVIA Reports") is in the nature of Royalty as defined under section 9(1)(vi) of the Act as well as under Article 12(3) of the Tax Treaty 2. The AO/DRP erred in not appreciating that the IQVIA Reports provided by the Appellant are basically a statistical compilation of data collected from doctors, stockiest dealers and other sources Le data available in the public domain and none of the clauses of Explanation 2 of section 9(1) (vi) of the Act which defines the term Royalty are satisfied and also does not fall within the definition of Royalty as pa Article 12(3) of the Tax Treaty. 3. The Appellant prays that addition of Subscription Fees received of Rs 53,75,62,440- as Royalty under the Act as well as Article 12(3) of the Tax Treaty, be deleted. Ground No. 2- Without prejudice to Ground No. 1 above, erroneous computation of total income at Rs. 128,47,56,900 and consequential erroneous tax liability of Rs 15,92,85,334 (including surcharge and cess) as against the....
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....e received by the assessee as royalty u/s 9(1)(vi) and under Article 12(13) of the India-Switzerland Tax Treaty. The fact in brief is that assessee is a company incorporated under laws of Switzerland and has its entire management and control in Switzerland. The assessee is engaged in the business of providing market research report of pharmaceuticals sector to its clients. For this purpose, Iqvia AG (foreign company) the assessee collects relevant data through various sources/forms mainly from doctors/stockist/dealers which is compiled in statistical and strategic manner in its reports. The assessee company has filed its return of income for assessment year 2019-20 on 29.11.2019. The case was selected for scrutiny assessment under CASS and notice u/s 143(2) of the Act was issued on 22.09.2019. During the course of assessment the assessing officer noticed that assessee had earned following income during the year under consideration :- "(i) Commission Income Rs. 6,61,872/- (ii) Subscription fees Rs. 53,75,62,440/- (iii) Interest Income earned on debenture Rs. 18,55,90,049/- (iv) Interest Income earned on external commission borrowings Rs. 2,33,8....
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....selected by Customers. 1.6 For the purpose of its database and IQVIA Reports, the Company collects relevant data through various forms mainly from doctors, stockiest, dealers and other sources The Company then merely compiles/ extrapolates the data to provide statistical information to its Customers in the form of IQVIA Reports. 1.7 The Company grants non-exclusive and non-transferable license to use the IQVIA Reports provided to the Customers and thereby it restricts the use of information by the Customer for its own benefit, back-up, etc. 1.8 During the year under consideration, the Company has delivered to its Indian Customer, majorly the following types of IQVIA Reports: a) World Review Molecule. The said reports provides access to the database to the Indian Customers, of all details / characteristics of the selected molecule. Further the data comprises of the statistical data of 73 Countries across the Globe. b) World Review Pack The said reports provides access to the database to the Indian Customers, of selected details / characteristics of the selected molecules based on the customer's requirement Further the data comprises o....
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....144C(5) of the Act on 24.01.2022 stating that for the assessment year 2013-14 & 2014-15 identical issue in the assessee's own case has been decided in favour of the assessee by the ITAT, Mumbai. However, to just keep the issue alive and to protect the interest of revenue rejected the objection filed by the assessee. 4. In conformity with the directions issued by the DRP the assessing officer has passed final assessment order u/s 143(3) r.w.s 144C(13) of the Act on 15.02.2022 and assessed the aforesaid subscription fees as royalty u/s 9(1)(vi) of the Act as well as Article 12(3) of the Act Tax Treaty. 5. During the course of appellate proceedings before us at the outset the ld. Counsel submitted that similar issue on identical facts has been adjudicated in favour of the assessee by the coordinate bench of the ITAT in assessee's own case for assessment year 2013-14 to 2017-18 and placed the copies of order of the ITAT in the paper book. On the other hand, the ld. D.R relied upon the order passed by the lower authorities. 6. Heard both the sides and perused the material on record. It is undisputed fact that in assessee's own case for earlier years for A.Y. 2013....
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....efore us. The authorities below have held that in the light of Hon'ble Karnataka High Court's judgment in the case of CIT Vs Wipro Ltd [(2011) 203 Taxman 621 (Kar)] and other judgments by the same Hon'ble High Court, which have been followed by a coordinate bench of this Tribunal as well, these receipts are required to be taxed as royalty under section 9(l)(vi) as also under article 12(3) of the Indo Swiss DTAA. The assessee is aggrieved and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We find that Hon'ble jurisdictional High Court, in the case of DIT Vs Dun and Breadstreet Information Services India Pvt Ltd[(2012) 20 taxmann. 695 (Mum)] has, while approving and concurring with the approach of Authority for Advance Ruling in the case of this very assessee, observed as follows: "The assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances in respect thereof without deducting tax at source. The Assessing Officer held that the assessee was liable to deduc....
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....n, judgment or previous or pending bankruptcy. Further, banking relationship and accountants, information like whether it is a patent company or authority concerned, has any branches etc. It also gives a rating of the company. The informations that are provided in a BIR are said to be publicly available; they are collected and complied by D&B associates. A BIR is accessible by any subscriber on payment of requisite price with regular internet access for which no particular software or hardware is required. The applicant states that access to data base of the applicant is available to public at large at a price as in case of buying a book and it is not a pre-requisite, that BIR must be downloaded by DBIS only and in fact some clients, such as Expert credit guarantee corporation, in fact, access the server themselves to download BIR. The applicant does not have any server in India for the use of DBIS. Indeed the applicant has specifically averred that the copyright in the BIR would neither be licensed nor assigned to either the DBIS or the Indian customer. From these aspects it is clear that the aforementioned ruling of the Authority is distinguishable on facts. If a group of compani....
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.... the provisions of the Income Tax Act 1961 apply only when these provisions are more favourable to the assessee vis-a-vis the provisions of the applicable DTAA. 8. When the above position was brought to the notice of the learned Departmental Representative, he simply placed his reliance on the stand of the authorities below. He could not, however, neither point out any legally distinguishable features between the case before Hon'ble jurisdictional High Court visa-vis this case, nor any other reasons for not following the binding precedent from Hon'ble jurisdictional High Court. Once our Hon'ble jurisdictional High Court has expressed a view, it cannot be open for us to be swayed by a contrary view expressed by any other Hon'ble High Court. No decision from Hon'ble jurisdictional High Court, contrary to the above decision of Hon'ble jurisdictional High Court, was brought to our notice. 9. In view of the above discussions, as also bearing in mind entirety of the case, we delete the impugned addition of Rs. 23,01,00,058 as royalty in the hands of the assessee. The assessee gets the relief accordingly. 10. No other issues were pressed ....