Case Law Details
Case Name : ACIT Vs. Vishwak Solutions Pvt. Ltd. (ITAT Chennai)
Appeal Number : IT Appeals No. 1935 & 1936/Mds/2010 C.O. No. 187/Mds/2013 & ITA Nos. 67 & 1634/Mds/2014
Date of Judgement/Order : 30/01/2015
Related Assessment Year : 2004-05 & 2005-06
Courts :
All ITAT ITAT Chennai
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Brief of the case: The ITAT Chennai in the case of Vishwak Solutions Pvt. Ltd. held that the payments made to US based entity towards securing server space in US is not in the nature of fee for technical services or royalty within the meaning of Article 12 of India – US DTAA. The same is rather business profits as per Article 7 of DTAA which can be taxed in India only when the foreign entity has Permanent Establishment (PE) in India.
Facts of the case:
- The assessee company paid data storage space charges for securing space on server to INetU, a non-resident in US. The said payment was made without deducting tax at source.
- AO was of the view that the said payments are taxable in India as incomes deemed to accrue or arise in India because the same was in the nature of royalty and fee for technical services.
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