Case Law Details
Avaya International Sales Ltd Vs ACIT (ITAT Delhi)
Introduction: The Avaya International Sales Ltd Vs ACIT case, presided over by ITAT Delhi, is an instrumental judgement that reopens discussions on the taxability of support/maintenance services in India. The central issue of consideration in this case was whether such payments can be classified as Fees for Technical Services (FTS) under the India – Ireland Double Taxation Avoidance Agreement (DTAA).
Analysis: The case was brought to the ITAT by Avaya International Sales Ltd, a corporate entity incorporated under Irish laws. The debate centred on service revenue worth Rs.121,51,92,143/- which the Assessing Officer categorized as FTS, thereby making it taxable in India. The ITAT, considering a similar dispute in the assessee’s previous case for the 2016-17 assessment year, agreed to restore the issue to the Assessing Officer for de novo adjudication.
Interestingly, both the Assessing Officer and learned Commissioner (Appeals) based their conclusions on the decision taken in the assessee’s case from the 2016-17 assessment year. However, the Tribunal, in its order from 07.03.2023, had sent the issue back to the Assessing Officer due to a lack of examination of relevant evidence and expert opinion.
FULL TEXT OF THE ORDER OF ITAT DELHI
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