CRM SERVICES INDIA PRIVATE LIMITED,NEW DELHI vs. DCIT, CIRCLE-4(2), NEW DELHI

ITA 1518/DEL/2022Status: DisposedITAT Delhi08 April 2024AY 2009-1023 pages
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What did the Tribunal hold?

The Tribunal held that the addendum to the royalty agreement, though entered into later, clarified the original intention that royalty was payable on all sales revenues, including those from third-party customers of TP USA. The DRP and TPO erred in their interpretation of the agreements and the addendum.

What were the facts?

The assessee, a subsidiary of TP USA, provided call center services to TP USA's clients. The assessee paid royalty to TP USA for using its intangible property and brand name. The dispute arose over whether royalty was payable on services rendered to third-party clients of TP USA.

What were the issues?

Whether royalty paid to an associated enterprise for services rendered to third-party customers of the associated enterprise is allowable. Interpretation of royalty and collaboration agreements and the effect of a retrospective addendum.

Which sections of the Income-tax Act were involved?

Section 254,Section 143(3),Section 144C

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Income Tax Appellate Tribunal, DELHI BENCHES : I : NEW DELHI

Before: SHRI SHAMIM YAHYA & SHRI ANUBHAV SHARMA

For Appellant: Shri Ajay Vohra, Sr. Advocate, Shri Neeraj Jain, Advocate &, Shri Abhishek Aggarwal, AR
For Respondent: Shri Rajesh Kumar, CIT-DR
Hearing: 17.01.2024Pronounced: 08.04.2024

PER ANUBHAV SHARMA, JM: These appeals are preferred by the Assessee against the orders dated 29.04.2022 passed u/s 254/143(3)/144C of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by Ld. Assessing Officer, Circle 4(2), Delhi (hereinafter referred to as the Ld. AO) for Assessment Years 2009-10 & 2010-

11.

As the issues are common, except the amount involved, thus the facts of AY 2009-10 are taken as foundation for deciding the two appeals.

ITAs No.1518 & 1519/Del/2022

2.

The appellant, a wholly owned subsidiary of Teleperformance USA (‘TP USA’), is set up as a

The order continues below.

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