Sale of Business Information Report by a non-resident can not be treated as ‘royalty’ taxable in India

Court: Mumbai bench of the Income tax Appellate Tribunal

Citation: M/s Dun & Bradstreet Information Services India Pvt. Ltd. Vs. ADIT [2010-TII-59- ITAT-MUM-INTL]

Brief :ITAT held that the consideration paid by the taxpayer to foreign affiliates for purchase of Business Information Report (BIR) was not ‘royalty’ within the meaning of explanation 2(iv) to section 9(1 )(vi) of the Income-tax Act, 1961 (the Act). Further, no withholding of tax is required when payment is made to foreign affiliates for purchase of Business Information Report.

Facts of the case

• The taxpayer was a wholly owned subsidiary of Dun & Bradstreet, USA (D&B). D&B had several operating subsidiary companies in major countries of the world. The operating subsidiaries and associates of D&B in each country were engaged in compiling and selling BIRs at predetermined price in their local markets and also to other associated companies worldwide.

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