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Facts
The revenue appealed against the orders of the CIT(A) which had followed a previous decision of the ITAT. The appeals concerned whether payments made by the assessee to Deloitte Global Holdings Services Limited for brand, communications, and knowledge management were royalty under the India-UK DTAA.
Held
The Tribunal held that these payments were not in the nature of royalty under Article 13(3) of the India-UK DTAA and therefore, the assessee was not required to deduct TDS. Consequently, the appeals filed by the revenue were dismissed.
Key Issues
Whether payments for brand, communications, and knowledge management constitute royalty under the India-UK DTAA, and if TDS was required to be deducted.
Sections Cited
13(3), 195(2)
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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI ANIKESH BANERJEE, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
The captioned appeals by the revenue are preferred against four separate order of ld. CIT(A)-56, Mumbai {hereinafter ‘the ld. CIT(A)} dated 16/12/2024 pertaining to AY 2020-21.
The common grievance in the captioned appeals read as under:- “1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) erred in following the decision of Hon'ble ITAT that the payment made by the assessee to the Deloitte Global Holdings Services Limited against 1) Global brand, 2) Global Communications and 3) Global technology/ Knowledge Management were not for information concerning commercial experience in terms of Article 13(3) of the India- I.T.A. No. 1711/Mum/2025 I.T.A. No. 1714/Mum/2025 2 UK DAA hence were not in the nature of royalty and is not liable for taxation in India with the meaning of Article 13(3) of the Indo UK treaty ?
2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to grant refund of taxes paid pursuant to the order u/s 195(2) dated 28.05.2019 even though the department has filed appeal against the decision of Hon'ble ITAT for A.Y. 2018-19 ?”
At the very outset, the ld. Counsel for the assessee pointed out that the issues raised in the captioned appeals have been decided by the Co- ordinate Benches in earlier AYs in favour of the assessee and against the revenue. The ld. D/R fairly accepted that the issues had been decided by the Co-ordinate Bench in earlier assessment years.
We have carefully perused the orders of the Co-ordinate Benches in to 233/Mum/2021; 4800 to 4804/Mum/2019 & 4810 to 4814/Mum/2019 [Deloitte Haskins & Sells LLP] order dated 27/07/2022. 5. We find force in the contentions of the ld. Counsel for the assessee. The Co-ordinate Bench in its order dt. 27/07/2022 (supra), has held as under:- “23. Accordingly, we hold that in all the appeals the payments made to Deloitte Global Holdings Ltd. do not fall in the scope and definition of Royalty under Article 13(3) of India UK DTAA and consequently appellants were not required to deduct TDS while making the payment. Thus, all the appeals of the assessees are allowed. 24. In the result, all the appeals of the asssessees are allowed.”