GOLDMAN SACHS AND CO. LLC,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX - 2(3)(2) , MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER

ITA No.9029/Mum/2025 (Assessment Year: 2023-24) Goldman Sachs And Co. LLC, ACIT, C/o. Ernst & Young LLP, 14th Floor, International Tax, The Ruby, 29 Senapati Bapat Marg, Circle 2(3)(2), Dadar (West), Vs. Kautilya Bhavan, C-41 to G-43, Mumbai - 400028 G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051 (Appellant) : (Respondent) PAN: AAGCG 9387H Appellant by : Shri Hiten Thakkar Respondent by : Shri Krishna Kumar, Sr. DR

Date of Hearing : 15.04.2026 Date of Pronouncement : 05.06.2026 O R D E R Per Saktijit Dey, Vice President:

By filing the present appeal, the assessee has challenged the final assessment order dated 13.11.2025 passed under Section 143(3) read with section 144C(13) of the Income Tax Act, 1961, (in short, ‘the Act’), pertaining to Assessment Year 2023-24, in pursuance to directions of learned Dispute Resolution Panel, (‘DRP’).

2 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

3 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

assessee had shown some receipts as recovery of employee related expenses and recovery of other expenses. Out of such expenses, the assessee has offered some part while it claimed that rest of such income is not taxable in India. In course of assessment proceedings, the Assessing Officer noticed that an amount of Rs.53,09,97,431/- received by the assessee towards market data charges has not been offered to tax by claiming it as business receipt and in absence of PE, not taxable in India. The assessee further explained before the Assessing Officer that in its own case and in Assessment Years 2013-14, 2014-15, 2015- 16 and 2017-18, the receipts towards market data charges have been held to be not taxable in India by the Income Tax Appellate Tribunal (ITAT). The Assessing Officer, however, did not accept the claim of the assessee. Stating that the decisions of the ITAT in assessee's case have not been accepted by the Department and further appeals have been preferred to the High Court, the Assessing Officer held that the receipts from market data charges are in the nature of royalty, hence taxable in India both under the provisions of Treaty as well as under the domestic law. The aforesaid decision of the Assessing Officer was also upheld by learned DRP.

4 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

2015-16, 2017-18 on 08-05-2023. He drew our attention to the observations of the Coordinate Bench on the issue.

“15. The issue arising in ground No. 3, raised in assessee‟s appeal, is pertaining to addition on account of market data charges as Royalty under Article 12 of the India-US DTAA. 16. The brief facts of the case pertaining to this issue are: During the assessment proceedings, it was noticed that the assessee has received communication charges of Rs.51.90 crores. Out of same, an amount of USD 32,85,994 (equivalent to Rs.17,84,29,474) represents payment for access to various specialised online information portals like Bloomberg, Reuters, Platts, Moody‟s Analytics, etc. These amounts were shown under the head “market data expenses‟. As per the assessee, these payments were cost allocations done to Indian parties with respect to the usage/allocation with respect to these accesses. The AO vide draft assessment order passed under section 143(3) r/w section 144C(1) of the Act treated these amounts as being in the nature of Royalty under Article 12(4) of the India-US DTAA on the basis that the receipts will be for the use of information concerning the industrial, commercial scientific

5 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

experience. The assessee filed detailed objections before the learned DRP against the aforesaid addition made by the AO. The DRP vide its directions issued under section 144C(5) of the Act held that the amount represents the payment made for access to various online databases, and corresponding costs have been allocated to various associated enterprises. The learned DRP further held that the nature of fee paid to these entities from whom data access right has been obtained are such that they fall within the ambit of Royalty as per the India-US DTAA, therefore the receipt of such amounts by the assessee from the end users is also liable to be treated as Royalty and therefore requires to be taxed in India. In conformity with the DRP directions, the AO passed the impugned final assessment order under section 143(3) r/w section 144C(13) of the Act on this issue. Being aggrieved, the assessee is in appeal before us. 17. We have considered the submissions of both sides and perused the material available on record. During the year under consideration, the assessee received an amount of USD 86,18,304 from its associated enterprises in India on the allocation of expenses pursuant to the agreement dated 01/06/2007. Since Goldman Sachs Group has operations spread across various jurisdictions through its affiliates, therefore from time to time the Group incurred certain costs in respect of common communication and technology platforms for the Group companies (in and outside India), which were subsequently allocated to the relevant entities on the basis of the respective usage. During the year, the assessee received an amount of USD 32,85,994 (equivalent to Rs.17,84,29,474) from Indian entity for allowing the usage of the database of various entities. The details pertaining to the same are as under:-

Particulars USD Bloomberg 983,077 Factset Research System Inc. 710,080 Reuters 579,234 Intex Solutions, Inc. 199,132 Platts 159,994

6 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

Capital IQ 145,039 Standard & Poors 102,333 Thomoson Financial 73,592 Moody‟s Analytics 61,117 Fitch 31,894 Haver Analytics 29,048 Money Net Inc. 25,234 Fame Information Services 25,012 SNL Financial 19,076 Interactive Data Corporation 18,637 Telekurs Inc. 16,660 THEMARKETS.com 14,720 Bridge 12,113 Factiva 11,978 Advantage Data Inc. 9,472 OPIS Energy Group 7,701 The McCloskey Group 7,115 Euromonitor International 6,548 NASDAQ 6,443 Option Metrics, LLC 5,295 Markit Group Limited 4,911 Street Account, LLC 4,764 Wm Company Ltd. 4,452 Wood Meckenzie Ltd. 4,350 Dow Jones & Company 2,667

7 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

Wealth Engine.com 1,655 Intelligence Press Inc. 923 GS Execution and Clearing 729 TCB Data System, Inc. 579 Clarksons 449 Money-Media 277 Copp Clark Professional 269 Market Axess 184 Prospect News Inc. 147 Average LIBOR.com 77 Options Price Reporting Authority 17 Total 32,85,994

8 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

year 2013–14, held that subscription fees received is not taxable as Royalty. The relevant findings of the coordinate bench of the Tribunal, in this regard, are as under:- “3. To adjudicate on this appeal, only a few material facts need to be taken note of. The assessee before us is a company incorporated, and fiscally domiciled, in Switzerland. The assessee company is engaged in providing market research report on pharmaceutical sector to its customers across the world at a predetermined subscription prices, The company collects, processes and utilizes the data and information, particularly in the field of medicine and pharmaceuticals for the delivery of reports through online IMS knowledge link. The company enters into agreements with its customers for providing the review reports (IMS reports) setting out the details of modules required to be accessed by the customers and the consideration for these services. In essence thus, the IMS reports, based on module selected, are statistical database compilations, providing geo economical data, about a pharma molecule, providing insight into the connected issues relating to information and developments. The licence access so granted is a non-exclusive and nontransferable right. It is consideration received, as allowing this non- exclusive, non-transferable access to the database and IMS reports which is subject matter of dispute before us. The authorities below have held that in the light of Hon‟ble Karnataka High Court's judgment in the case of CIT Vs Wipro Ltd [(2011) 203 Taxman 621 (Kar)] and other judgments by the same Hon'ble High Court, which have been followed by a coordinate bench of this Tribunal as well, these receipts are required to be taxed as royalty under section 9(l)(vi) as also under article 12(3) of the Indo Swiss DTAA. The assessee is aggrieved and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 5. We find that Hon'ble jurisdictional High Court, in the case of DIT Vs Dun and Breadstreet Information Services India Pvt Ltd[(2012) 20 taxmann.695 (Mum)] has, while approving and concurring with the approach of Authority for Advance Ruling in the case of this very assessee, observed as follows: “The assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances in respect thereof without

9 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

deducting tax at source. The Assessing Officer held that the assessee was liable to deduct tax at source and accordingly passed an order under section 195 read with section 201 of the Act. The appeal filed by the assessee was dismissed by the Commissioner of Income-tax (Appeals). On further appeal, the Income-tax Appellate Tribunal set aside the order passed under section 195 read with section 201 of the Act by following its decision in the assessee's own case for the assessment year 2002-03 in I.T.A. No. 1773/Mum/2006 and the decision of the Authority for Advance Rulings on identical facts in the case of Dun and S.A. Bradstreet Espana In re Authority for Advance Rulings No. 615 of 2003 [2005] 272ITR 99 (AAR)), D and B Europe Authority for Advance Rulings No. 657 of 2005, dated October 27, 2005, and D and B UK Authority for Advance Rulings No. 656 of 2005, dated October 27, 2005. In all these cases the Authority for Advance Rulings held that the sale of very same business information reports by the subsidiaries of Dun and Bradstreet US in Spain, Europe and V. K. to the assessee did not attract the provisions of section 195 of the Act. Though the decision of the Authority for Advance Rulings is not binding in the present case, since the decision of the Authority for Advance Rulings relates to the very same business information reports imported by the petitioner and no fault in the decision of the Authority for Advance Rulings is pointed out, we see no reason to interfere with the decision of the Income-tax Appellate Tribunal.” 6. The AAR's decision, which is so concurred with, inter alia states as follows: “The instant case it is not a case of paying consideration for the use of or right to use any copyright of literary, artistic or scientific work or any patent trade mark or for information of commercial experience. The Commissioner sought to bring the payments under royalty/fees for technical service for the reason that the BIRs are copyright protected and end-users are required to use for their own purpose and the analysis of raw data provided in the BIRs would be similar to that of providing a technical or consultancy services. We have already mentioned above that a BIR is a standardized product of D&B, it provides factual information on the existence, operation, financial condition, management and experience line of business, facility and location of a company; it also provides special events like any suit, lien, judgment or previous or pending bankruptcy. Further, banking relationship and accountants, information like whether it is a patent company or authority concerned, has any branches etc. It also gives a rating of the company. The

10 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

informations that are provided in a BIR are said to be publicly available; they are collected and complied by D&B associates. A BIR is accessible by any subscriber on payment of requisite price with regular internet access for which no particular software or hardware is required. The applicant states that access to data base of the applicant is available to public at large at a price as in case of buying a book and it is not a pre- requisite, that BIR must be downloaded by DBIS only and in fact some clients, such as Expert credit guarantee corporation, in fact, access the server themselves to download BIR. The applicant does not have any server in India for the use of DBIS. Indeed the applicant has specifically averred that the copyright in the BIR would neither be licensed nor assigned to either the DBIS or the Indian customer. From these aspects it is clear that the aforementioned ruling of the Authority is distinguishable on facts. If a group of companies collects information about the historical places and places of interest for tourists in each country and all informations are maintained on a central computer which is accessible to each constituent of the Group in each country, can a supply of such information electronically on payment of price be treated as royalty or fee for technical services ? We think not. The next case relied upon by the Commissioner is also a ruling of the Authority in Ericsson Telephone Corpn. India AB, In re [ 1997] 224ITR 2031. In that case the applicant was a company incorporated in Sweden. It provided, inter alia, services within radio and telecommunication. It entered into contracts with three Indian companies for the introduction of the cellular system of telecommunication in India and opened branch offices in India at New Delhi, Bombay and Madras. The Indian company informed applicant that while making payments under the agreement they would withhold income tax at 55% as provided in the Finance Act, 1995. According to the applicant tax deduction could not have exceeded 5,5% of the gross payments, as the net profit on the contract would not be more 10%, It was, therefore, not a case of whether the amount paid could be termed as fee for technical services. It was admittedly a case of payment of fee for technical services. For the abovementioned reasons, payments made by the DBIS to the applicant for purchases of BIRs do not answer the description of 'royalties' within the meaning of para 3 of article 13 of the treaty. So payments made by the DBIS to the applicant cannot be regarded as royalty payment. In our view, the applicant has rightly equated the transaction of sale of BIRs to sale of a book, which does not involve any transfer of intellectual property or a book.

11 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

12 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

of market data charges. As a result, ground No. 3 raised in assessee‟s appeal is allowed.”

13 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

the assessee to explain why the reimbursement of such expenses should not be treated as FIS/FTS as seconded employees have rendered technical services. While objecting to proposed action of the Assessing Officer, assessee submitted that in case of the payor AEs in India, the ITAT has held that there is no requirement for deduction or tax at source as payments are not in nature of FIS/FTS. The Assessing Officer, however, did not agree with the submissions of the assessee. Stating that the decision of the ITAT in case of AEs have not been accepted by the Department and further appeals are pending before the High Court, the Assessing Officer rejected assessee’s claim and brought the receipts to tax by treating as FIS/FTS. Though, the assessee objected to such addition before learned DRP. However, the addition made was upheld. Accordingly, addition made was incorporated in the final assessment order.

14 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

ITAT in case of M/s GSISPL. While deciding the issue in ITA No. 362 to 369 & 345/Bang/2020, vide order dated 29-04-2022, the Coordinate Bench held that the payments are not in the nature of FIS/FTS, hence, did not require deduction of tax at source under Section 195 of the Act. The aforesaid decision of the Coordinate Bench has been upheld by Hon’ble Karnataka High Court while dismissing the appeal of the Revenue being ITA No.128 of 2024. In fact, in respect of another group entity i.e. Goldman Sachs International, the Coordinated Bench, while deciding the appeal, being ITA No. 6033/Mum/2025, has passed an order on 30.03.2026, holding similar nature of receipts not to be FIS/FTS. Pertinently, the Assessing Officer has not disputed the fact that the ITAT held the receipts in dispute not to be in the nature of FIS/FTS. Only reason for which he has brought the amount to tax is the Department has preferred further appeal before the Hon’ble High Court against the decision of the Tribunal. This, in our view, cannot be a valid reason to not follow the decision of a higher appellate authority. Thus, in absence of any factual difference, respectfully following the decisions of the Coordinated Benches as referred to above, we hold that the amount in dispute cannot be treated as FIS/FTS under the India-US DTAA and the Assessing Officer is directed to delete the addition.

15 ITA No. 9029/Mum/2025 Goldman Sachs And Co. LLC

Order pronounced in the open court on 05/06/2026.

Sd/- Sd/- (Prabhash Shankar) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 05/06/2026 Aks/-

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai