Resellling IT licences and
servicing/supporting the same post sale thru Indian AE entity - Payment
receipts in the hands of the Dutch parent company whether royalty/FTS under
Indo-Dutch DTAA - Article 12
Facts:
Assessee was the Dutch parent of the Indian AE who were
into reselling IT licences, networking equipments. The Indian entity was
servicing and rendering after sales support on call/ticketing basis to the
assessee parent. The Dutch parent was in receipt of monies from channel
partners, resellers, distributors for its networking/software equipments/end
user licences sold. Revenue's plea was that these were royalty and FTS taxable
as per the Indo-Dutch DTAA Article - 12. Assessee's plea was that there
was nothing that was "made available" in the process of the
licences/networking. CIT(A) concurred with the assessee and dropped the
additions. On appeal by revenue for three consecutive asst. years to the ITAT -
Held against the revenue that the resale of networking,
licences etc. were not royalty/FTS as per Indo-Dutch DTAA Article 12. A
detailed discussion was also made to examine if these were copyrights taxable
under the DTAA and it was confirmed that the said rights were also
not copyrights.
Applied:
Murex Southeast Asia Pvt. Ltd. v. DCIT [ITA No.2338/Mum/2022,
dt. 08-05-2023]
Amazon Web Services Inc. v. ACIT [ITA Nos. 522 &
523/Del/2023, dt. 01-08-2023] : 2023 TaxPub(DT) 4738 (Del-Trib)
DDIT v. Reliance Industries Limited (2016)
69 taxmann.com 311 (Mumbai-Trib) : 2016 TaxPub(DT) 2745 (Mum-Trib)
Raymond Ltd v. DCIT (2003) 86 ITD 791 (Mum-Trib) : 2003
TaxPub(DT) 0237 (Mum-Trib)
CIT v. De Beers India Minerals Private Limited (2012)
346 1TR 467 (Kamataka-HC) : 2012 TaxPub(DT) 2504 (Karn-HC)
DDIT v. Preroy A.G (2010) 39 SOT 187 (Mumbai-Trib) :
2010 TaxPub(DT) 1836 (Mum-Trib)
Case: Asstt. CIT
v. Juniper Networks International B.V. 2023 TaxPub(DT) 6105 (Mum-Trib)