TaxTMI 
TaxTMI 
2025 (11) TMI 2052
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.... Panel (in short ld. DRP) for assessment year 2022-23, raising following grounds: 1. That on the facts and circumstances of the 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 1,47,44,58,663 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,....
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....BS division cannot be taxed as royalty under Section 9(1)(vi) of the Act as well as Article 12(3) of India-US DTAA. 3. That on the facts and circumstances of the case and in law, the Ld. AO has erred in levying interest of INR 4,32,67,210 under Section 234B of the Act. 4. That on the facts and circumstances of the case and in law, the Ld. AO has grossly erred in computing the aggregate income tax liability (including interest) of the Appellant at INR 19,20,49,126. 5. That on the facts and circumstances of the case and in law, the Ld. AO has erred in computing the correct amount of interest on refund under Section 244A of the Act. 6. That on the facts and circumstances of the case and in law, the Ld. AO ha....
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....rd the rival submissions and perused the relevant material on record including the order of the lower authorities on 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 experience. The assessee's experience lies in the creation of/maintaining such information 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, vi....
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....ivative works. In short, the purchaser has not acquired the copyright of the article or of the database. What the buyer gets is a copyrighted product, and accordingly the consideration paid is not royalty, but for purchase of a product. In the instant case too, what is acquired by the customer is a copyrighted article, copyrights of which continue to lie with assessee for all purposes. It is a well settled law that copyrighted article is different from a copyright, and that consideration for the former, i.e. a copyrighted article does not qualify as royalties. 19. Thus, the principles noted by us in the earlier part of this order in the context of the income earned by way of CAS fee are squarely applicable to the subscription reven....
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...., we see no reason to deviate from the view so taken by the Coordinate Bench which has consistently been followed in subsequent years. In light of the same, we uphold the plea so taken by the ld AR on behalf of the assessee and hold that subscription revenues for CAS as well as PUBS divisions cannot be brought to tax as royalty in terms of section 9(1)(vi) as well as Article 12(3) of India-USA DTAA in the hands of the assessee and the addition so made is hereby directed to be deleted. 11. In light of the aforesaid, where we have deleted the addition, other grounds raised by the assessee including the ground challenging the jurisdiction of the AO have become academic in nature and we do not deem it necessary to adjudicate the same a....