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TMI Blog2022 (5) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer (AO) / Dispute Resolution Panel (DRP) erred in concluding that the Subscription Income received by the Appellant for providing access to its online database of statistically compiled pharmaceutical data collected from public domain ("IQVIA Reports") is in the nature of 'Royalty as defined ' under section 9(l)(vi) of the Act as well as under Article 12(3) of the Tax Treaty. 2. The AO / DRP erred in not appreciating that the IQVIA Reports provided by the Appellant are basically a statistical compilation of data collected from doctors, stockist, dealers and other sources i.e. data available in the public domain and none of the clauses of Explanation 2 of section 9(1) (vi) of the Act which defines the term 'Royalty' are satisfied and also does not fall within the definition of 'Royalty' as per Article 12(3) of the Tax Treaty. 3. The Ld. DRP also failed to appreciate that Honorable ITAT vide its order dated 13 July 2020 in Appellant's own has deleted the impugned treatment of Subscription Income as Royalty for AY 201314, 2014-15 and 2015-16. 4. The Appellant prays that addition of Subscription Fees received of Rs. Rs. 46,24,44.838/- as Roya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) The assessee entered into an Agreement with its customers for providing the Review Reports ("IQVIA Reports‟). The Agreement sets out the details of the modules that are required by the customers and permitted to be accessed with applicable fees; (d) The IQVIA Reports based on modules selected, are statistical database compilations, which provide geoeconomical data about a pharma molecule (medicine) thereby providing insights into the economic and political issues affecting the pharmaceutical and healthcare industries in a jurisdiction. The IQVIA Reports are akin to a magazine that provides latest information and developments and it relates to database, information, etc., relevant to the pharmaceutical industry. Further, IQIVA reports are standard data reports of the module selected by customers; (e) For the purpose of its database and IQUVIA reports, the assessee collects relevant data through various forms mainly from doctors, stockiest, dealers and other sources. The assessee then merely compiles/extrapolates the data to provide statistical information to its customers in the form of IQVIA reports; (f) The assessee grants non-exclusive and non-transferable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the assessee by the decision of the Co-ordinate Bench of the Tribunal rendered in assessee"s own case. The learned Counsel further submitted that the DRP did not grant relief to the assessee merely to keep the issue alive. 9. On the other hand, Shri Milind Chavan, the learned Departmental Representative vehemently relied upon the orders passed by the lower authorities. 10. We have considered the rival submissions and perused the material available on record. We find that the Co-ordinate Bench of the Tribunal in assessee"s own case in IMS AG (now known as IQVIA AG) v/s DCIT, in ITA no.6445/Mum./2016, vide order dated 13.07.2020, for the assessment year 2013-14, while holding that subscription fees received by the assessee is not taxable as Royalty under the provisions of DTAA, observed as under:- "3. To adjudicate on this appeal, only a few material facts need to be taken note of. The assessee before us is a company incorporated, and fiscally domiciled, in Switzerland. The assessee company is engaged in providing market research report on pharmaceutical sector to its customers across the world at a predetermined subscription prices, The company collects, processes and utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 2002-03 in I.T.A. No. 1773/Mum/2006 and the decision of the Authority for Advance Rulings on identical facts in the case of Dun and S.A. Bradstreet Espana In re Authority for Advance Rulings No. 615 of 2003 [2005] 272ITR 99 (AAR)), D and B Europe Authority for Advance Rulings No. 657 of 2005, dated October 27, 2005, and D and B UK Authority for Advance Rulings No. 656 of 2005, dated October 27, 2005. In all these cases the Authority for Advance Rulings held that the sale of very same business information reports by the subsidiaries of Dun and Bradstreet US in Spain, Europe and V. K. to the assessee did not attract the provisions of section 195 of the Act. Though the decision of the Authority for Advance Rulings is not binding in the present case, since the decision of the Authority for Advance Rulings relates to the very same business information reports imported by the petitioner and no fault in the decision of the Authority for Advance Rulings is pointed out, we see no reason to interfere with the decision of the Income-tax Appellate Tribunal." 6. The AAR's decision, which is so concurred with, inter alia states as follows: "The instant case it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Commissioner is also a ruling of the Authority in Ericsson Telephone Corpn. India AB, In re [ 1997] 224ITR 2031. In that case the applicant was a company incorporated in Sweden. It provided, inter alia, services within radio and telecommunication. It entered into contracts with three Indian companies for the introduction of the cellular system of telecommunication in India and opened branch offices in India at New Delhi, Bombay and Madras. The Indian company informed applicant that while making payments under the agreement they would withhold income tax at 55% as provided in the Finance Act, 1995. According to the applicant tax deduction could not have exceeded 5,5% of the gross payments, as the net profit on the contract would not be more 10%, It was, therefore, not a case of whether the amount paid could be termed as fee for technical services. It was admittedly a case of payment of fee for technical services. For the abovementioned reasons, payments made by the DBIS to the applicant for purchases of BIRs do not answer the description of 'royalties' within the meaning of para 3 of article 13 of the treaty. So payments made by the DBIS to the applicant cannot be r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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