Court :
AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Brief :
Section 9, of the Income-tax Act, 1961, read with article 12, of the Direct Tax Avoidance Agreement between India and USA - Income - Deemed to accrue or arise in India - Applicant is an Indian company and is mainly engaged in business of providing call centre, data processing and information technology support services to its group companies - It has entered into an agreement with BTA, an American company, under which BTA provides applicant with two-way transmission of voice and data through telecom bandwidth for which fixed monthly recurring charge for circuit between America and Ireland and for circuit between Ireland and India is payable to BTA - Whether by availing of facility provided by BTA through its network/circuits, there is no usage of equipment by applicant; rather it is a case of BTA utilizing its own network and providing a service that enables applicant to transmit voice and data through telecom bandwidth and, therefore, payment made by applicant to BTA cannot be brought within definition of ‘royalty’ under Explanation 2 to clause (vi) of section 9(1) or under article 12 of Treaty - Held, yes - Whether amounts payable by applicant to BTA under agreement would be in nature of ‘fee for included services’ within meaning of article 12(4) - Held, no
Citation :
AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Dell International Services India (P.) Ltd., In re
JUSTICE P.V. REDDI, CHAIRMAN
AND A. SINHA AND RAO RANVIJAY SINGH, MEMBER
A.A.R. 735 OF 2006
JULY 18, 2008
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