Payment towards data storage charges to a non-resident is not royalty or fee for technical services

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 mad...