Case Law Details
DCIT Vs M/s Reliance Jio Infocomm Ltd. (ITAT Mumbai)
As is discernible from the record, the assessee pursuant to the terms of the “agreement” had only received standard facilities i.e bandwith services from RJIPL. In fact, as observed by the CIT(A), the assessee only had an access to services and did not have any access to any equipment deployed by RJIPL for providing the band with services. Apart there from, the assessee also did not have any access to any process which helped in providing of such band with services by RJIPL. As a matter of fact, all infrastructure and process required for provision of bandwith services was always used and under the control of RJIPL, and the same was never given either to the assessee or to any other person availing the said services. We are persuaded to subscribe to the observations of the CIT(A) that as the process involved to provide the bandwith services was not a “secret” i.e IPR in the process was not owned/registered in the name of RJIPL, but was a standard commercial process that was followed by the industry players, therefore, the same could not be classified as a “secret process” which would have been required for charactering the aforesaid payment made by the assessee to RJIPL as “royalty” under the India-Singapore DTAA. We are further in agreement with the view taken by the CIT(A) that as the amount paid by the assessee to RJIPL was neither towards use of (or for obtaining right to use) Industrial, commercial or scientific equipment, nor towards use of (or for obtaining right to use) any secret formula or process, therefore, the same could not be classified as payment of “royalty” by the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by the revenue is directed against the order passed by the CIT(A)-57, Mumbai, dated 21.10.2016 that was passed by him while disposing off the appeal filed by the assessee under Sec. 248 of the Income Tax Act,1961 (for short “I-T Act”). The revenue assailing the order of the CIT(A) has raised before us the following grounds of appeal:
“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that an amount paid by Reliance Jio Infocomm Ltd. (“RJIL‘ or “the Assessee‘) to Reliance Jio Infocomm Pte Ltd., (“RJPIL‘), Singapore for availing bandwidth services was not liable to tax in India, as Royalty as per the provisions of the Income-tax Act, 1961 (‘the Act’) and the India- Singapore Double Taxation Agreement (‘DTAA’)?
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