Case Law Details
Amazon Web Services Inc. Vs ACIT (ITAT Delhi)
Captioned applications have been filed by the assessee seeking stay on recovery of following outstanding demands:
i) Assessment year 2014-15 : Rs.190,85,62,430
ii) Assessment year 2016-17 : Rs.358,27,66,285
2. Before us, learned senior counsel appearing for the assessee submitted that the assessee is a Tax Resident of United States of America (USA) and is engaged in the business of providing Cloud Computing Services to customers around the world. He submitted, based on proceedings under Section 201/201(1A) of the Act conducted in case of Snapdeal to verify TDS compliance, assessment proceedings under Section 147 of the Act were initiated against the assessee and while completing the assessments, the Assessing Officer held that the receipts of the assessee from Cloud Computing Services are in the nature of Royalty and Fee for Technical Services (FTS)/Fee For Included Services (FIS), hence, chargeable to tax in India. He submitted, apart from the fact that the assessment orders are invalid for various reasons, the assessee has a strong case on merits, as, in respect of payers in India from whom the assessee had receipts from Cloud Computing Services, different benches of the Tribunal have held that the receipts cannot be treated as Royalty/FTS. Further, he submitted, the Assessing Officer has made computational error by imposing higher tax rate as per domestic law instead of the tax rates applicable under the relevant tax treaties. He submitted, in case rates provided under the tax treaties are applied, the demand will substantially reduce. He submitted, though, the assessee in this regard has filed rectification applications before the Assessing Officer, however, they are still pending. Thus, he submitted, recovery of outstanding demand may be stayed and early hearing of the appeals may be granted.
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