Post a dozen of your own India-Us DTAA
S. 9: Earnings – Deemed so you’re able to accrue otherwise develop inside the Asia (Royalties/costs to possess technology characteristics – Remittance) – percentage built to All of us mainly based organization into the cost reimbursement on which parties got equivalent right to fool around with and not paid off amount to royalty, levy of interest you/s. 201(1A) is actually unjustified.
This new AO passed acquisition u/s. 201(1) and you may held one remittance from assessee in order to GTRC was absolutely nothing but royalty according to arrangements off s.9 (1)(vi) and also in terms of post twelve of DTAA anywhere between India and you may U . s ..
For this reason, levy interesting u/s. 201(1A) was not justified.(r.w.s. 195 and you can 201 and article several regarding DTAA between India and you can USA)(AYrs : 2012-thirteen and you may 2013-14)
S. 9(1)(vi) : Money considered to accrue otherwise occur in the India – Royalty – Money out-of product sales out-of app licenses held from the characteristics regarding Royalty earnings – ITAT kept that earnings was gotten available from app/licenses rather than having separating which have copyright of one’s software – for this reason that isn’t Royalty earnings just like the defined not as much as Article 12 of DTAA.
The AO looked for to assess providers money acquired of the Assessee available out-of app/licenses because the Royalty money u/s nine(1)(vi) of the Work r.w. To your attention, the newest Tribunal held your purchase was obtainable off license/software, where the end-associate can get access to and rehearse the brand new licensed software product and not getting parting which have copyright the program. Because it’s not Royalty, the amount of money is within the nature regarding organization profits of your Assessee. To own providers earnings of a non-citizen organization are nonexempt from inside the Asia around Blog post 7 of this new Asia-United states of america DTAA, it is necessary you to for example foreign firm must have a permanent establishment (“PE”) from inside the India when it comes to Article 5 of one’s said DTAA. (AY 2009-10 & 2014-15)
S. eleven : Property held to possess charitable intentions – local rental income derived from permitting out studio in order to artisans to own practise Indian classical audio arrives in the ambit from “education” – Assessee was entitled to different you/s eleven understand that have S. 2(15)
This new Tribunal noticed you to Assessee are a non-profit believe involved with training Indian Ancient Songs and that drops for the field of “education”
The new assessee are a non-profit faith inserted u/s 12A and you will 80G of the Act. Throughout the relevant AY, the assessee-believe gotten studio costs of Rs 16,72,197/- out of certain music artists. The AO stored your business was rented towards artists with an intention and work out profits regarding shield regarding charity facts and you may taxed particularly facility charge while the company income of Assessee less than S.11(4A) of your Work. CIT(A) kept your order of your own AO. Given that trust was engaged in training, the fresh proviso so you can section 2(15) cannot incorporate since the made clear by the CBDT Circular No. eleven dated even though it requires the holding a commercial passion. The fresh new tribunal indexed the history of your Faith observed that invoices off Rs. 16,72,197/- is located at a great subsidized fees while the facts of the studios try persisted to experience a portion of the target out-of the new Faith and should not getting construed once the a business. Reliance has been put-on brand new judgement regarding Madras Higher Court in the case of Sri Thyaga Brahma Gana Sabha 188 ITR 160 (Mad) judge. (AY 2010-eleven & 2012-13)
S. 12A: Charitable or spiritual trust – Subscription from (Cancellation) – Assessee unwilling to avail ‘benefit’ out-of registration ‘obtained’ u/s. 12A can not be destined to, because of the action of otherwise by the inaction of funds bodies, continue said registration