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)
5 GST Judgments in 2026 Every Business Should Be Watching
The year 2026 has already delivered several landmark GST decisions that could significantly influence tax compliance, assessments, and litig...
-
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...
-
THE issues before the Bench are - Whether when an expenditure is claimed to have been incurred by an assessee for promotion of his busine...
-
The posting had been move to another website. Please click the link below to get the access of the same. https://taxofindia.wordpress....
-
The Reserve Bank of India has introduced a new framework governing export and import transactions under FEMA. These regulations are effectiv...
-
THE issues before the Bench are - Whether no penalty u/s 271(1)(c) is warranted even if assessee makes false claim of Sec 80IA benefits ...
-
What is a Digital Signature? Answer: A digital signature authenticates electronic documents in a similar manner a handwritten signatur...
-
This Tax Alert summarizes a recent judgement of the Supreme Court (SC) [1] on whether a show cause notice (SCN) under Section 74 of the ...
-
This Tax Alert summarizes a recent ruling of the Gujarat High Court (HC)1 on the taxability of corporate guarantee provided by the Petitio...
-
The overall effective tax rate of a U.S. multinational corporation may have significant impact on the value of its stock. Therefore, it ...
-
This Tax Alert summarizes a recent ruling of the Delhi High Court (HC) [1] on whether the newly introduced pre-deposit requirement for fi...
No comments:
Post a Comment