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TMI Blog2024 (8) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... on contained u/s 144C(13) of the Act. AO s findings/observations on the role of assessee are self-contradictory. While on one hand, the AO has acknowledged the fact that the assessee is an aggregation service provider and not a content creator, in the same breath, he says that assessee s contention that it is a mere aggregator of educational courses is not correct. AO has not brought on record any material to establish the fact that the assessee provides technical services through its online platform. Merely because the assessee has a customized landing page, it does not mean that the assessee provides technical services, that too, through human intervention. AO in our view, has not been able to prove such fact. Even, assuming for argument s sake, the services provided by the assessee is of technical nature, that by itself would not be enough to bring such receipts within the purview of Article 12(4) of India USA DTAA, unless the make available condition is satisfied. Burden is entirely on the Revenue to prove that in course of rendition of services, the assessee has transferred technical knowledge, know-how, skill etc. to the service recipient, which enables him to utilize such te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. However, as far as the receipts of Rs. 75,66,52,591/-, the assessee claimed that such receipts are neither in the nature of royalty nor FIS, hence, not taxable in India. The Assessing Officer, however, was not convinced with the submission of the assessee. After verifying the agreements with one of the Indian customers, viz., Gandhi Institute of Technology and Management, the Assessing Officer observed that the assessee provides two types of services, such as, Content Services and User Services. He observed, under the User Services, the assessee provides (i) customized landing page featuring the Organization logo and selected courses, (ii) user engagement reports, (iii) payment solution(s) that allow users to seamlessly access premium course experiences and skip checkout, and (iv) enterprise-level user support. Whereas, Content Services means, access to assessee s course and/or Specialization certificate services, including access to Course assessments and grades through online open content offerings. 6. The Assessing Officer observed, the assessee is not merely providing Content Services to the customers of India, but is also providing a whole range of User Services , which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h respect to the customer and the client and the basis of the information availed through the proceedings conducting by him u/s 133(6) of the Act The Panel also takes a note of assessee's submission dated 14.02.2023 by which it has filed a copy of agreement with Gandhi Institute of Technology and Management which does not appear to be considered and discussed by the AO in the draft assessment order. The AO needs to factually examine the assessee's contention as to whether the terms and condition of this agreement do enable the assessee to make it service provider in hosting content services and user services in relation to courses developed by the educational institution and also enabling the assessee for providing technical services to its customer. Accordingly, the AO is directed to verify the assessee's contention in light of the said agreement by passing a speaking and reasoned order. The Panel hastens to clarify that the AO shall not conduct any fresh inquiry in this regard; the verification shall be made on the basis of documents/submissions available on the assessment records. The assessee's objections in this regard are hereby, disposed off accordingly. 8. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drew our attention not only to the observations of the Assessing Officer, but also the terms and conditions of the agreement between the assessee and the Indian customers. 11. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Insofar as the activity of the assessee is concerned, it is established on record that the assessee provides a global online learning platform, wherein, various courses and degrees from leading universities and companies are provided. It is a fact on record that the contents of such courses and degrees are created by the concerned universities and companies and not by the assessee. The assessee acts as a mere facilitator between the concerned university/companies and the customers who want to undertake the courses of the concerned university/companies. The assessee merely provides access to the contents of the universities/companies through the platform on receipt of fees. 12. In fact, the Assessing Officer in the draft assessment order has clearly observed that the assessee is not an educational institution but an aggregation service provider, which brings educational learning on one platform. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nology and Management has been discussed in the draft assessment order. By these observations what the Assessing Officer implies is, learned DRP has issued directions without proper application of mind. This, in our view, is highly objectionable and against the provision contained under section 144C(13) of the Act. 14. Be that as it may, Assessing Officer s findings/observations on the role of assessee are self-contradictory. While on one hand, the Assessing Officer has acknowledged the fact that the assessee is an aggregation service provider and not a content creator, in the same breath, he says that assessee s contention that it is a mere aggregator of educational courses is not correct. The Assessing Officer has not brought on record any material to establish the fact that the assessee provides technical services through its online platform. Merely because the assessee has a customized landing page, it does not mean that the assessee provides technical services, that too, through human intervention. The Assessing Officer, in our view, has not been able to prove such fact. Even, assuming for argument s sake, the services provided by the assessee is of technical nature, that by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the use of, or right to use of, any copyright of literary, artistic or scientific work and that the expression literary work , under section 2(o) of the Copyright Act, includes 'literary database' but then he fell in error of reasoning inasmuch as the payment was not for use of copyright of literary database but only for access to the literary database under limited non exclusive and non transferable licence. Even during the course of hearing before us, learned Departmental Representative could not demonstrate as to how there was use of copyright. In our considered view, it was simply a case of copyrighted material and therefore the impugned payments cannot be treated as royalty payments. This view is also supported by Hon'ble Bombay High Court's judgment in the case of DIT (International Taxation) v. Dun Bradstreet Information Services India (P.) Ltd. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated and stored in the database. In the aforesaid view of the matter, the subscription fee received cannot be considered as a fee for technical services as well. By way of illustration we may further observe, online databases are provided by Taxman, CTR online, etc. which are accessible on subscription not only to professionals but also any person who may be having interest in the subject of law. When a subscriber accesses the online database maintained by Taxman/CTR online etc. he only gets access to a copyrighted article or judgment and not the copyright. Similar is the case with the assessee. Therefore, in the facts of the present case, the subscription fee received by the assessee cannot be treated as royalty under Artile-12(3) of India-Germany Tax Treaty. 16. Similar view was expressed by another Coordinate Bench in case of Relx Inc. Vs. ACIT (supra). In our view, the ratio laid down in these decisions squarely apply to the facts of the present appeal. In view of the aforesaid, we hold that the receipts do not qualify as FIS under Article 12(4) of India USA tax treaty. 17. Thus, our decision above, would apply mutatis mutandis to ITA No. 3646/Del/2023 as well. 18. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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