Delhi ITAT upholds
taxation of consideration for providing SAP/CAD software related support
as FTS under Article 13(4)(a), being ancillary and subsidiary to the enjoyment
of the right / property for which royalty was received by assessee (a UK
co., JCBE), clarifies that ‘make available’ clause under Article 13(4)(c) is
not applicable; ITAT notes that in earlier years, assessee had entered into
bilateral agreement under which it used to receive royalty from JCB India
(Indian subsidiary) for licensing the technology with an exclusive right to
manufacture and market, however, during relevant AY, assessee entered into a
Tripartite Agreement whereby the technology was sub-licensed by assessee to JCB
investments, and the royalty paid by JCB India was routed through JCB
Investments; Thus noting that entire royalty amount was passed on to assessee
through JCB Investments less 0.5%, ITAT holds JCB Investments as a pass through
entity, remarks that "Substance will rule over
form", observes that except for this routing of royalty through JCB
Investments, all the terms and conditions of the agreement between the assessee
and JCB India including secondment of assessee's employee to JCB India for
rendering of services; Rejects assessee’s stand that co-ordinate bench ruling
holding JCB India a Service PE of assessee cannot be applied in present facts,
observes that there is no difference in the facts and circumstances except for
the tripartite vs. bilateral arrangement; Further follows co-ordinate bench
ruling to hold that royalty was not effectively connected to PE in India,
therefore, cannot be considered under Article 13(6), but should be taxed as
royalty / FTS under Article 13 itself:ITAT
Subscribe to:
Post Comments (Atom)
Draft Income-tax Rules, 2026 - Key changes and brief overview
The Central Board of Direct Taxes (‘CBDT’) has released the Draft Income-tax Rules, 2026, along with accompanying Draft Forms, to operatio...
-
A new website launched for TDS related matters www.tdscpc.gov.in TRACES – T DS R econciliation A nalysis and C orrection E nabling S yste...
-
01. No change in Income Tax rates, surcharge & cess. 02. Income tax Act 2025 effective from April 1, 2026. 03. Old regime tax ...
-
The Central Board of Direct Taxes (CBDT) released the Draft Income Tax Rules, 2026 on February 7, 2026. It has invited suggestions and opi...
-
01. The present employer contribution is restricted to 12%. 02. In the proposal the 12% limit removed 03. It means employer contri...
-
The posting had been move to another website. Please click the link below to get the access of the same. https://taxofindia.wordpress....
-
At first glance, DGFT Public Notice No. 42/2025-26 appears to be a mundane update—just three new fields to populate on the electronic ...
-
Introduction Employee welfare is a cornerstone of corporate responsibility, and gratuity forms a critical part of the social security benefi...
-
In a recent and noteworthy ruling, the Hon’ble Delhi Income Tax Appellate Tribunal has provided important clarity on the scope of appellat...
-
In a significant ruling that provides relief to taxpayers and clarifies the scope of the Goods and Services Tax (GST) law, the Nagpur Benc...
-
COMMON ERRORS OF GST PORTAL. 1. Error Code- 404- No documents found Error Category / Form- Download File request Error Massage – ...
No comments:
Post a Comment