Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (11) TMI AT This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2024 (11) TMI 630 - AT - Income Tax


Issues:
1. Interpretation of Equalization levy provisions and Section 10(50) amendment.
2. Interpretation of DTAA between India-UK regarding royalty.
3. Determination of income nature from sale of advertisement spaces.
4. Assessment of revenue earned through advertising space.

Analysis:
1. The appeal by the revenue challenged the CIT(A)'s order regarding the Equalization levy provisions and the amendment to Section 10(50) of the Income Tax Act, 1961. The issue revolved around the taxability of income generated from online advertisements. The AO argued that the exemption under section 10(50) would not apply for royalty or fees for technical services taxable under the Act. The Tribunal analyzed the provisions and held that the payments made by the assessee were not taxable as royalty or FTS, based on previous Tribunal orders and the India-Ireland DTAA.

2. The second issue involved the interpretation of the DTAA between India and the UK regarding royalty. The CIT(A) disregarded the AO's argument that the DTAA provisions should be harmonized with Section 9 of the Income Tax Act, 1961. The Tribunal, following previous decisions, held that the payments made were not in the nature of royalty or FTS, thereby dismissing the revenue's grounds.

3. The third issue addressed whether the sale of advertisement spaces by Google Ireland constituted income in the nature of royalty under section 9(1)(vi) of the IT Act, 1961 and the India-Ireland DTAA. The AO contended that the revenue earned through advertising space was taxable as royalty. However, the Tribunal, relying on previous decisions, held that the payments made were not taxable as royalty, aligning with the findings in the GIPL case.

4. The final issue pertained to the assessment of revenue earned through advertising space on the assessee's website. The AO asserted that the primary issue was the revenue from advertising space, not software issues. The Tribunal, considering previous Tribunal orders, concluded that the payments made were not taxable as royalty or FTS. The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal and affirming that the payments made were not taxable in the hands of the assessee.

In conclusion, the Tribunal dismissed the revenue's appeal, holding that the payments made to the assessee could not be taxed as royalty or FTS based on the provisions of the Income Tax Act and relevant DTAA, as established in previous Tribunal orders.

 

 

 

 

Quick Updates:Latest Updates