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Payment made for online banner advertisement on the portal of a foreign company not taxable as royalty
Case Law Details
- Case Name
- Yahoo India (P.) Ltd. Deputy Commissioner of Income-tax (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2004-05
- Courts
- ITAT Mumbai
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ITAT MUMBAI BENCH ‘L’
Yahoo India (P.) Ltd. v. Deputy Commissioner of Income-tax, Range 7(3), Mumbai
IT APPEAL NO. 506 (MUM.) OF 2008 [ASSESSMENT YEAR 2004-05]
JUNE 24, 2011
ORDER
P.M. Jagtap, Accountant Member. –
This appeal filed by the assessee is directed against the order of the learned CIT(A) XXX, Mumbai dated 19-10-2007 whereby he confirmed the disallowance of Rs. 34,86,947 made by the Assessing Officer under section 40(a) on account of payment made by assessee to Yahoo Holdings (Hong Kong) Ltd., without deducting tax at source.
2. Assessee company...
This judgment establishes that banner advertisement, in the specific case, was not Royalty OR Technical Services. However, it was a business income. Still judgement went in favour of assessee because this business income was not chargeable to tax under ITA in absence of PE.
After explanation added to section 195 vide Budget 2012-13, PE is not a criteria. And this has been made from retrospective date. Does it mean, if this case was to be decided on today’s date, it would have gone against the assessee?
I am a SME in software export and my business heavily depends on Banner Advertisements. I shall be grateful if your other readers also react to it.
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Banerjee