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“use of equipment”

International TaxSection 9(1)(vi)Section 9(1)(vi)119 judgments

The decision most relied on for use of equipment is Asia Satellite Telecommunications Co. Ltd. v. DIT (332 ITR 340), cited in 359 judgments on BharatTax.

Leading authorities on use of equipment

Asia Satellite Telecommunications Co. Ltd. v. DIT
332 ITR 340 · 2011 · High Court
359
citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

DIT v. New Skies Satellite BV
382 ITR 114 · 2016 · High Court
325
citing judgments

An amendment to the Income Tax Act, such as the Finance Act, 2012 amendment to Section 9(1)(vi) defining royalty, does not automatically override or alter the definition of 'royalty' as provided in a Double Taxation Avoidance Agreement (DTAA) unless the DTAA itself is bilaterally amended. The definition of royalty in a DTAA remains unaffected by unilateral changes to domestic law.

DIT v. Nokia Networks OY
358 ITR 259 · 2013 · High Court
276
citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

Verizon Communications Singapore Pte Ltd. v. ITO
361 ITR 575 · 2014 · High Court
156
citing judgments

Payments for the use of equipment or copyrighted articles constitute royalty income under section 9(1)(vi) of the Income-tax Act, necessitating TDS deduction under section 195 and attracting disallowance under section 40(a)(i) for non-compliance.

DDIT v. Savvis Communication Corporation
69 Taxmann.com 106 · 2016 · ITAT
107
citing judgments

Payments for web hosting services, including data back-up, maintenance, security, and uninterrupted services, are not taxable as royalty under Section 9(1)(vi) of the Income Tax Act, as they do not constitute 'consideration for use of, or right to use, scientific equipment'.

Kotak Mahindra Primus Ltd. v. DDIT
11 SOT 578 · 2007 · ITAT
99
citing judgments

Payments for data processing services using a mainframe computer and specialized software are not taxable as fees for the use of equipment if the Indian entity lacks independent rights or physical access to use the computer or software.

Bharti Airtel v. ITO (TDS)
67 Taxmann.com 223 · 2016 · High Court
53
citing judgments

Payment for human intervention to install or put equipment in place, distinct from human intervention involved in the transportation of calls between networks, does not constitute Fee for Technical Services (FTS) under section 9(1)(vii) of the Income-tax Act.

Asia Satellite Telecommunication Co. Ltd. v. Dy. CITT
85 ITD 478 · 2003 · ITAT
44
citing judgments

Payments for transponder services do not constitute payment for the use of equipment and therefore do not qualify as royalty income under section 9(1)(vi) of the Income-tax Act for a non-resident. The use of satellite transponder services by broadcasters is not considered the use of equipment.

Judgments citing use of equipment

Refinitiv Ltd., Mumbai vs. DDIT (I.T) - 2(1), Mumbai

Appeals are disposed off

ITA 3422/MUM/2006[2002-2003]Status: DisposedITAT Mumbai28 Jun 2023AY 2002-2003

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

ADIT (It)-2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

Appeals are disposed off

ITA 3366/MUM/2006[2002-2003]Status: DisposedITAT Mumbai28 Jun 2023AY 2002-2003

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

DDIT (International I. T) 2(1), Mumbai vs. M/S. Reuters on Line S.A, Mumbai

Appeals are disposed off

ITA 5379/MUM/2005[2002-2003]Status: DisposedITAT Mumbai28 Jun 2023AY 2002-2003

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

The DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

Appeals are disposed off

ITA 8464/MUM/2004[2001-2002]Status: DisposedITAT Mumbai28 Jun 2023AY 2001-2002

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

The DDIT (I.T) 2(1) vs. M/S. Reuters Ltd

Appeals are disposed off

ITA 8463/MUM/2004[2001-2002]Status: DisposedITAT Mumbai28 Jun 2023AY 2001-2002

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

Refinitiv Ltd., Mumbai vs. The Dy DIT (I.T) 2(1), Mumbai

Appeals are disposed off

ITA 8348/MUM/2004[2001-2002]Status: DisposedITAT Mumbai28 Jun 2023AY 2001-2002

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

Appeals are disposed off

ITA 5228/MUM/2004[2000-2001]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-2001

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

Refinitiv Ltd., Mumbai vs. DDIT (I.Taxation) Range 2, Mumbai

Appeals are disposed off

ITA 5092/MUM/2004[2000-01]Status: DisposedITAT Mumbai28 Jun 2023AY 2000-01

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Assessment Year 2000 – 01

For Appellant: Shri Niraj D Sheth, AdvocateFor Respondent: Shri Sunil Umap, DR

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

ACIT, International Taxation, Circle 3(1)(2), New Delhi vs. Sabre Decision Technologies International Llc, Usa

In the result, the appeal of the revenue is dismissed

ITA 7354/DEL/2017[2013-14]Status: DisposedITAT Delhi03 Jan 2023AY 2013-14

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 234ASection 44DSection 9Section 9(1)(vi)

other intellectual properties which are located at its Head Office in the USA. Comparison to a simplicitor rent payment or lease charges for use of equipment such as a transponder is out of place and incorrect. 4.4.5 To understand the business of the assessee, the public website of the assessee ... lease line to its customers for the consideration paid to SDT. The arguments of the assessee to consider the payments as payments for use of equipment are therefore, incorrect. 4.4.7 The assessee further submits the interpretation of the term ‘Use or right’ to use any industrial, commercial or scientific equipment

Sabre Decision Technologies International Llc, New Delhi vs. ACIT, International Taxation, Circle 3(1)(2), New Delhi

In the result, the appeal of the revenue is dismissed

ITA 5782/DEL/2017[2014-15]Status: DisposedITAT Delhi03 Jan 2023AY 2014-15

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Tarandeep Singh, AdvFor Respondent: Sh. Gangadhar Panda, CIT-DR
Section 234ASection 44DSection 9Section 9(1)(vi)

other intellectual properties which are located at its Head Office in the USA. Comparison to a simplicitor rent payment or lease charges for use of equipment such as a transponder is out of place and incorrect. 4.4.5 To understand the business of the assessee, the public website of the assessee ... lease line to its customers for the consideration paid to SDT. The arguments of the assessee to consider the payments as payments for use of equipment are therefore, incorrect. 4.4.7 The assessee further submits the interpretation of the term ‘Use or right’ to use any industrial, commercial or scientific equipment

Nan Lion Ship Management Llc, Mumbai vs. Assistant Commissioner of Income Tax (International Taxation) -3(3)(1), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 1857/MUM/2022[2019-20]Status: DisposedITAT Mumbai30 Dec 2022AY 2019-20

Bench: Shri Amit Shukla, Jm & Shri Gagan Goyal, Am आयकरअपीलसं./ I.T.A. No. 1857/Mum/2022 (निर्धारणवर्ा / Assessment Year: 2019-20) Acit (Int. Tax) – 3(3)(1), Nan Lian Ship Management 1630, 16Th Floor, Air India Llc Building Nariman Point, C/O- Chamber 2 & 3, Cosmos बिधम/ Mumbai-400 021 Trade Place, Ground Floor, Vs. Khatu Building, Opp-Bse, Fort, Mumbai-400 001 स्थायीलेखासं./जीआइआरसं./ Pan No. Aagcn0478E (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant By : Shri Nishit Gandhi /Dhanlaxmi Iyer, Ld. Ars प्रत्यथीकीओरसे/Respondent By : Shri Soumendu Kumar Das, Ld. Dr सुनवाईकीतारीख/ : 03.11.2022 Date Of Hearing घोषणाकीतारीख / : 30.12.2022 Date Of Pronouncement आदेश / O R D E R Per Amit Shukla: The Aforesaid Appeal Has Been Filed By The Assessee Against The Final Assessment Order Dated 27.05.2022, Passed By Ld. Ao U/S 2

For Appellant: Shri Nishit GandhiFor Respondent: Shri Soumendu Kumar Das
Section 144C(5)Section 2Section 44BSection 9(1)(vi)

said that PSCL had the full control of the ship, which cannot be treated as payment received was use or right to use the equipment i.e. ship. Further in support of his argument, he relied on the decision of ITAT Mumbai Bench in the case of M/s Smit Singaport ... case of leasing out of an equipment and use or right to 21 I.T.A. No. 1857/Mum/2022 Nan Lian Ship Management LLC use of equipment is for the carriage in the vessel owned and operated by the owner and it is not a case of simply by letting out the ship

Edenred Sa, Mumbai vs. ACIT (It) 2(2)(1), Mumbai

In the result, this appeal by the assessee is allowed

ITA 5193/MUM/2018[2015-16]Status: DisposedITAT Mumbai23 Dec 2022AY 2015-16

Bench: Shri S. Rifaur Rahman & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra SinghFor Respondent: Shri Soumendu Kumar Dash
Section 143(3)Section 144CSection 144C(13)Section 144C(5)

reads as under: “7. In respect of articles 11 (Dividends), 12 (Interest) and 13 (Royalties, fees for technical services and payments for the use of equipment), if under any Convention, Agreement or Protocol signed after 1-9-1989, between India and a third State which is a member ... OECD, India limits its taxation at source on dividends, interest, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate of scope provided for in this Convention on the said items of income, the same rate

Edenred Sa, Mumbai vs. DCIT (It) 2(1)(2), Mumbai

In the result, this appeal by the assessee is allowed

ITA 7248/MUM/2017[2014-15]Status: DisposedITAT Mumbai23 Dec 2022AY 2014-15

Bench: Shri S. Rifaur Rahman & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra SinghFor Respondent: Shri Soumendu Kumar Dash
Section 143(3)Section 144CSection 144C(13)Section 144C(5)

reads as under: “7. In respect of articles 11 (Dividends), 12 (Interest) and 13 (Royalties, fees for technical services and payments for the use of equipment), if under any Convention, Agreement or Protocol signed after 1-9-1989, between India and a third State which is a member ... OECD, India limits its taxation at source on dividends, interest, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate of scope provided for in this Convention on the said items of income, the same rate

Edenred Sa, Mumbai vs. DCIT (It) 2(1)(2), Mumbai

In the result, this appeal by the assessee is allowed

ITA 7247/MUM/2017[2013-14]Status: DisposedITAT Mumbai23 Dec 2022AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra SinghFor Respondent: Shri Soumendu Kumar Dash
Section 143(3)Section 144CSection 144C(13)Section 144C(5)

reads as under: “7. In respect of articles 11 (Dividends), 12 (Interest) and 13 (Royalties, fees for technical services and payments for the use of equipment), if under any Convention, Agreement or Protocol signed after 1-9-1989, between India and a third State which is a member ... OECD, India limits its taxation at source on dividends, interest, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate of scope provided for in this Convention on the said items of income, the same rate

Edenred Sa, Mumbai vs. DCIT (It) 2(2)(1), Mumbai

In the result, this appeal by the assessee is allowed

ITA 508/MUM/2016[2012-13]Status: DisposedITAT Mumbai23 Dec 2022AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Sandeep Singh Karhail

For Appellant: Shri Jitendra SinghFor Respondent: Shri Soumendu Kumar Dash
Section 143(3)Section 144CSection 144C(13)Section 144C(5)

reads as under: “7. In respect of articles 11 (Dividends), 12 (Interest) and 13 (Royalties, fees for technical services and payments for the use of equipment), if under any Convention, Agreement or Protocol signed after 1-9-1989, between India and a third State which is a member ... OECD, India limits its taxation at source on dividends, interest, royalties, fees for technical services or payments for the use of equipment to a rate lower or a scope more restricted than the rate of scope provided for in this Convention on the said items of income, the same rate

M/S. Global Cricket Corporation Pte. Ltd., Mumbai vs. DDIT It-3(1), Mumbai

Appeal of the Revenue is dismissed, and cross-objection by the Assessee are disposed off as infructuous

ITA 1510/MUM/2009[2003-2004]Status: DisposedITAT Mumbai14 Dec 2022AY 2003-2004
Section 143(1)Section 143(3)Section 147

Appellant from LG Electronics Private Limited („LG‟) and Hero Honda Motors Private Limited (Hero Honda‟) is for the use or right to use commercial equipment and is royalty taxable at the rate of 10 percent on a gross basis as per Article 12(2)(b) of the India-Singapore ... from LGEIL and HH were taxable as „royalties‟ as per Article 12(2)(b) of the DTAA for the use or right to use commercial equipment. ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years

M/S. Global Cricket Corporation Pte. Ltd., Mumbai vs. ADIT (Int. Taxation) - 3(1), Mumbai

Appeal of the Revenue is dismissed, and cross-objection by the Assessee are disposed off as infructuous

ITA 3135/MUM/2006[2002-2003]Status: DisposedITAT Mumbai14 Dec 2022AY 2002-2003
Section 143(1)Section 143(3)Section 147

Appellant from LG Electronics Private Limited („LG‟) and Hero Honda Motors Private Limited (Hero Honda‟) is for the use or right to use commercial equipment and is royalty taxable at the rate of 10 percent on a gross basis as per Article 12(2)(b) of the India-Singapore ... from LGEIL and HH were taxable as „royalties‟ as per Article 12(2)(b) of the DTAA for the use or right to use commercial equipment. ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years

ADIT (It)-3(1), Mumbai vs. M/S. Global Cricket Corporation Pte. Ltd., Mumbai

Appeal of the Revenue is dismissed, and cross-objection by the Assessee are disposed off as infructuous

ITA 3130/MUM/2006[2002-2003]Status: DisposedITAT Mumbai14 Dec 2022AY 2002-2003
Section 143(1)Section 143(3)Section 147

Appellant from LG Electronics Private Limited („LG‟) and Hero Honda Motors Private Limited (Hero Honda‟) is for the use or right to use commercial equipment and is royalty taxable at the rate of 10 percent on a gross basis as per Article 12(2)(b) of the India-Singapore ... from LGEIL and HH were taxable as „royalties‟ as per Article 12(2)(b) of the DTAA for the use or right to use commercial equipment. ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 5025/MUM/2004[1999-2000]Status: DisposedITAT Mumbai05 Jul 2022AY 1999-2000
Section 143(3)

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception

DDIT (I.T) 2(1), Mumbai vs. M/S. Reuters Ltd., Mumbai

In the result, both the appeals filed by the Assessing Officer are dismissed, and both the appeals filed by the assessee are allowed in the limited terms indicated above

ITA 5024/MUM/2004[1998-1999]Status: DisposedITAT Mumbai05 Jul 2022AY 1998-1999
Section 143(3)

that was a case in which the assessee had provided its clients its system and application programming interface, including interactive features and use of equipment. In the present case, however, as the agreement specifically provides in Article 8, at page 8 of the agreement, „all equipment necessary for reception