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TMI Blog2023 (4) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... DEL/2022 - - - Dated:- 5-4-2023 - DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER For the Assessee : Shri Ravi Sharma, Adv.; Shri Rishabh Malhotra, A.R.; For the Department : Shri Anshuman Pattnaik, [CIT] D. R.; ORDER PER YOGESH KUMAR U.S., JM These two appeals are filed by the assessee against two separate orders of the ld. Commissioner of Income Tax (Appeals) [hereinafter referred to CIT (Appeals) New Delhi, both dated 22.06.2022 for assessment years 2018-19 and 2019-20. I.T.A. No. 1877/DEL/2022 (A.Y 2018-19) 2. The assessee has raised the following grounds of appeal:- Ground No. 1 On the facts and in the circumstances of the case and in law, the Honourable Dispute Resolution Panel ('the Hon'ble DRP') has erred in confirming the action of the Deputy Commissioner of Income-tax, Circle Int Tax 3(1)(1), Delhi ('the Ld. AO') of making an addition of INR 18,65,00,000 received from the Indian customers as subscription fees by treating it as Fees for Technical Services ('FTS') as per the provisions of section 9(1)(vii) of the Income-tax Act, 1961 (the Act) without apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puty Commissioner of Income-tax, Circle Int Tax 3(1)(1), Delhi (the Ld. AO') of making an addition of INR 7.36,93,619 received from the Indian customers as subscription fees by treating it as Fees for Technical Services ('FTS') as per the provisions of section 9(1)(vii) of the Income-tax Act, 1961 (the Act) without appreciating that there are no technical services rendered at all. Accordingly, the Appellant prays that the aforesaid addition made by the Ld. AO ought to be deleted. Ground No. 2 On the facts and in the circumstances of the case and in law, the Hon'ble DRP has erred in confirming the action of the Ld. AO of making an addition of INR 7.36,93,619 received from the Indian customers as subscription fees by the Appellant by treating it as Fees for Included Services (FIS) under Article 12 of the tax treaty between India and the United States of America ('India-USA DTAA') without appreciating that even if services are considered to be rendered, these services do not make available any technical knowledge to the recipient and hence are not taxable in India. Accordingly, the Appellant prays that the beneficial provisions of India-US ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 by assessing the total income of the assessee at Rs. 18,65,00,000/- as Fees For Technical Services and brought to tax @10% on the gross basis as per Section 115A of the Act and under Article 12 of India- USA DTAA vide order dated 22/06/2022. In so far as, Assessment Year 2019- 20 is concerned the final assessment order came to be passed by assessing the total income of the assessee at Rs.9,41,39,051/- out of which Rs.7,36,93,619/- is treated as Fees For Technical Services which is taxable in India @ 10% on the gross basis as per Section 115A of the Act and under Article 12 of India-USA DTAA vide orders dated 22/06/2022. 6. Aggrieved by the final assessment orders dated 22/06/2022 for Assessment Year 2018-19 and 2019-20 passed u/s 143 read with Section 144(13) of the Act, the assessee preferred the above two Appeals on the grounds mentioned above. 7. The Ld. Counsel for the assessee submitted that the lis involved in the present appeal is no more Res-Integra which has been adjudicated and decided against the Department in the case of group entities of the assessee declaring that subscription fees would be in the nature of Business Income . Further contended that the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... host of information started on subject/topic relating to legal and tax matters. The person interested to purchase the electronic version of the books/journals/articles can be purchased it on line by paying the price of the book and in so far as the frequent customers of the books/journals /articles available on Lexis Nexis can opt to subscribe data base for certain period which allows the customers to access the e-books/e-journals/e-articles on the online data base. In both the cases, the content received by the user remains the same that is books, journal and articles in an electronic format. 12. The assessee is a part of Elsevier Group and in case of other group entities on the similar issue of access/subscription to web-site, the ITAT Tribunal of Mumbai Bench in the case of Elsevier Information Systems GmbH Vs. Dy. Commissioner of Income Tax (IT) in ITA No. 1683/Mum/2015, dealing with the similar issue for the Assessment Year 2011-12 held as under:- 15. A customer/subscriber can access the data stored in the database by paying subscription. The Department held the subscription paid to Dun Brad Street Espana, S.A., for accessing the data to be in the nature of royalty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ternational Taxation) v. Dun Bradstreet Information Elsevier Information Systems GmbH Services India (P.) Ltd. [2011] 338 ITR 95/[2012] 20 taxmann.com 695. 16. The same view was again expressed by the Tribunal in DCIT v/s Welspun Corporation Ltd., [2017] 77 taxmann.com 165. If we examine the facts of the present appeal in juxtaposition to the facts of the decisions referred to herein before, it can be seen that the facts are almost identical and akin. In the referred cases the assessees were also maintaining databases of information collated from various journals and articles and allowed access to the users to use such material as required by them. Keeping in view the ratio laid down in the decisions (supra), the payment received by the assessee has to be held to have been received for use of copyrighted article rather than for use of or right to use of copyright. 17. Having held so, the next issue which arises for consideration is, whether the subscription fee can be treated as fees for technical services. As discussed earlier, it is evident that the assessee has collated data from various journals and articles and put them in a structured manner in the database to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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