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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 ..... d in favour of the assessee by the decision of the Co ordinate Bench of the Tribunal for preceding assessment years. Thus we uphold the plea of the assessee and delete the impugned addition in respect of subscription fees received by the assessee. Decided in favour of assessee. - ITA No.1203/Mum./2021 - - - Dated:- 11-5-2022 - SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER For the Assessee : Shri Madhur Agarwal For the Revenue : Shri Milind Chavan, Sr. DR ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the final assessment order dated 19.04.2021, passed under section 143(3) r/w section 144C(13) of the Act by the Assessing Officer for the assessment year 2016 17. 2. In this appeal, the assessee has raised following grounds: Ground No. I - Non-taxable business income of Rs. 46,24,44,838/- in the nature of Subscription Fees for standard online market research database on pharmaceutical sector taxed as Royalty under Section 9(1)(vi) of the Income-tax Act, 1961 ('the Act') and under Article 12(3) of the India- Switzerland Tax Treaty ('Tax Trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income on 30.03.2018, declaring total income of Rs.17,70,93,233. During the course of assessment proceedings, it was observed from the return of income that the assessee has, inter alia, earned subscription fees of Rs.46,24,44,838. It was further observed that the assessee has, inter-alia, claimed exemption from taxation for its aforesaid income earned under the head subscription fees as per Article 7 r/w Article 5 of the DTAA. Accordingly, the assessee was asked to show cause as to why the subscription fee amounting to Rs.46,24,44,838, received from Indian customers should not be treated as Royalty under the provisions of the Act as well as DTAA. In reply, the assessee made following submissions: (a) The assessee is a tax resident of Switzerland under the DTAA and tax resident certificate has been issued in its favour. Accordingly, the assessee is eligible to take the recourse to the beneficial provisions of the tax treaty; (b) The assessee is engaged in providing market research reports on pharmaceutical sector to its customers across the globe at a predetermined subscription price. The assessee mainly collects, process and utilize the data and information, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order dated 28.11.2019, passed under section 144C(1) of the Act did not agree with the submissions filed by the assessee and held that the subscription fees received by the assessee is in the nature of Royalty under the provisions of section 9(1)(vi) of the Act as well as under Article 12(3) of the DTAA. The Assessing Officer further noted that similar finding of the Assessing Officer in assessment years 2013 14, 2014 15 and 2015 16 was upheld by the Dispute Resolution Panel ( DRP ). 6. The assessee filed detailed objections against the addition made by the Assessing Officer. Vide directions dated 15.03.2021, issued under section 144C(5) of the Act, the DRP, though noted that identical issue in assessee s own case has been decided in its favour by the Co ordinate Bench of the Tribunal, rejected the objections filed by the assessee in order to keep the issue alive and to protect the interest of the Revenue. 7. In conformity with the directions issued by the DRP, the Assessing Officer vide impugned final assessment order dated 19.04.2021, assessed subscription fees as Royalty under the provisions of the Act as well as DTAA. Being aggrieved, the assessee is in appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble High Court, which have been followed by a coordinate bench of this Tribunal as well, these receipts are required to be taxed as royalty under section 9(l)(vi) as also under article 12(3) of the Indo Swiss DTAA. The assessee is aggrieved and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We find that Hon'ble jurisdictional High Court, in the case of DIT Vs Dun and Breadstreet Information Services India Pvt Ltd[(2012) 20 taxmann.695 (Mum)] has, while approving and concurring with the approach of Authority for Advance Ruling in the case of this very assessee, observed as follows: The assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances in respect thereof without deducting tax at source. The Assessing Officer held that the assessee was liable to deduct tax at source and accordingly passed an order under section 195 read with section 201 of the Act. The appeal filed by the assessee was dismissed by the Commissioner of Income-tax (Appeals). On further appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The informations that are provided in a BIR are said to be publicly available; they are collected and complied by D B associates. A BIR is accessible by any subscriber on payment of requisite price with regular internet access for which no particular software or hardware is required. The applicant states that access to data base of the applicant is available to public at large at a price as in case of buying a book and it is not a pre-requisite, that BIR must be downloaded by DBIS only and in fact some clients, such as Expert credit guarantee corporation, in fact, access the server themselves to download BIR. The applicant does not have any server in India for the use of DBIS. Indeed the applicant has specifically averred that the copyright in the BIR would neither be licensed nor assigned to either the DBIS or the Indian customer. From these aspects it is clear that the aforementioned ruling of the Authority is distinguishable on facts. If a group of companies collects information about the historical places and places of interest for tourists in each country and all informations are maintained on a central computer which is accessible to each constituent of the Group in each cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Departmental Representative, he simply placed his reliance on the stand of the authorities below. He could not, however, neither point out any legally distinguishable features between the case before Hon'ble jurisdictional High Court vis-a-vis this case, nor any other reasons for not following the binding precedent from Hon'ble jurisdictional High Court. Once our Hon'ble jurisdictional High Court has expressed a view, it cannot be open for us to be swayed by a contrary view expressed by any other Hon'ble High Court. No decision from Hon'ble jurisdictional High Court, contrary to the above decision of Hon'ble jurisdictional High Court, was brought to our notice. 9. In view of the above discussions, as also bearing in mind entirety of the case, we delete the impugned addition of Rs 23,01,00,058 as royalty in the hands of the assessee. The assessee gets the relief accordingly. 10. No other issues were pressed before us. In any event, the other points raised in the appeal were in the nature of consequential levies. Once the main addition itself is deleted, all these issues are rendered academic. 11. We further find that similar findings were al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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