“Section 9(1)(vii)”

Section References (mined)Section 9Section 9(1)(vii)933 judgments

The decision most relied on for Section 9(1)(vii) is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on Section 9(1)(vii)

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT

432 ITR 471 · 2021 · Supreme Court

914

citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. Samsung Electronics Ltd.

345 ITR 494 · 2012 · High Court

461

citing judgments

Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.

Ishikawajima Harima Heavy Industries Ltd. v. DIT

288 ITR 408 · 2007 · Supreme Court

394

citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

CIT v. De Beers India Minerals (P.) Ltd.

346 ITR 467 · 2012 · High Court

371

citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

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).

CIT v. Toshoku Ltd.

125 ITR 525 · 1980 · Supreme Court

270

citing judgments

A non-resident commission agent is not chargeable to tax in India on commission income if no business operations are carried out in India. Consequently, no TDS is required under Section 195 on such payments.

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

Judgments citing Section 9(1)(vii)

Visteon Corporation, Michigan vs. DCIT, Intenl Taxn, Circle-2(2), Chennai

In the result, the appeals filed by the assessee in ITA Nos

ITA 259/CHNY/2023[2014-15]Status: DisposedITAT Chennai26 Jul 2024AY 2014-15

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita Nos.:259, 260, 261 & 262/Chny/2023 िनधा"रण वष"/Assessment Years:2014-15, 2015-16, 2016-17 & 2017-18 & S.A. Nos. 28, 29 & 30/Chny/2023 [In Ita Nos. 259, 261 & 262/Chny/2023] M/S. Visteon Corporation, The Deputy Commissioner Grace Lake Corporation Centre, Vs. Of Income Tax, Van Buren Township, International Taxation, Michigan - 48111 Circle 2(2), Chennai. Pan: Aadcv 5660K (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri Ajay Vohra, Sr. Advocate (By Virtual) Shri Aditya Vohra, Advocate ""यथ" क" ओर से/Respondent By : Shri Nilay Bara Som, Cit सुनवाई क" तारीख/Date Of Hearing : 01.07.2024 घोषणा क" तारीख/Date Of Pronouncement : 26.07.2024 आदेश /O R D E R Per Mahavir Singh: These Three Appeals By The Assessee In Ita Nos.259, 261 & 262/Chny/2023 Are Arising Out Of The Final Assessment Orders Passed By The Assistant Commissioner Of Income Tax, International Taxation Circle 2(2), Chennai Vide Orders Of Even Date 06.01.2023 In Pursuant To The Directions Of The Dispute Resolution Panel-2

For Appellant: Shri Ajay Vohra, Sr. Advocate (By Virtual)For Respondent: Shri Nilay Bara Som, CIT

Section 142(1)Section 263

right in treating the payments received by the assessee during the year under consideration as fees for technical services' under section 9(1)(vii) (b)of the Act and fee for included services' under Article 12(4)(a) of the Indo-USA DTAA. The claim of the assessee that such ... services rendered under Other heads is in the nature of Technical services and fall under the category of Fees for Technical Services under section 9(1)(vii)(b) of the IT Act, 1961 and as Fees for Included Services as per Article 12(4) of the India-US DTAA

Mixpanel Inc., Usa vs. ACIT Circle- 2(2)(1) Int.Taxation., New Delhi

The appeal is allowed

ITA 1996/DEL/2022[2018-19]Status: DisposedITAT Delhi26 Jul 2024AY 2018-19

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: Shri Kamal Sawhney, AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT(DR)

Section 143(2)Section 143(3)Section 144C(13)

well as India-US DTAA. Reliance was placed on the definition of fees for technical services given in explanation 2 under section 9(1)(vii) of the Act and Article 12(4) of India-USA DTAA, where fees for included services is defined. 6. The assessee is in appeal raising

Invesco Uk Limited, Uk vs. ACIT, Circle Int.Tax. 2(1)(1), New Delhi

The appeals of the assessee are allowed

ITA 785/DEL/2023[2020-21]Status: DisposedITAT Delhi23 Jul 2024AY 2020-21

Bench: Sh. G.S. Pannu & Sh. Anubhav Sharma

Section 143(3)Section 144C(5)Section 270ASection 274

apply. 4.1 Ld. Counsel has submitted that the above observations of the Hon'ble High Court have been rendered in the context of Section 9(1)(vii) of the Act read with Article 12 of the India- Ireland DTAA wherein the condition of make available is not contained therein

Invesco Holding Company (Us) Inc., Usa vs. ACIT, Circle Int. Tax. 2(1)(1), New Delhi

The appeals of the assessee are allowed

ITA 784/DEL/2023[2020-21]Status: DisposedITAT Delhi23 Jul 2024AY 2020-21

Bench: Sh. G.S. Pannu & Sh. Anubhav Sharma

Section 143(3)Section 144C(5)Section 270ASection 274

Honda Trading Asia Co. Ltd., Thailand vs. DCIT, Intl. Taxation Circle, Noida

ITA 7276/DEL/2018[2015-16]Status: DisposedITAT Delhi23 Jul 2024AY 2015-16

Bench: Shri G.S.Pannu, Hon’Ble & Shri Anubhav Sharma

Section 12Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 234ASection 234D

relevant is that Section 9 of the Act enumerates certain incomes to be deemed to accrue or arise in India and Section 9(1)(vii) of the Act provides under what conditions FTS income shall be considered to accrue or arise in India. Explanation 2 to Section 9(1)(vii

Honda Trading Asia Co. Ltd., New Delhi vs. DCIT, Noida

ITA 1160/DEL/2015[2010-11]Status: DisposedITAT Delhi23 Jul 2024AY 2010-11

Bench: Shri G.S.Pannu, Hon’Ble & Shri Anubhav Sharma

Section 12Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 234ASection 234D

Ashok Bablani, Mumbai vs. Income Tax Office (Int Tax)-1(2)(1), Mumbai

In the result, appeal of the assessee is allowed on merits

ITA 3281/MUM/2023[2011-12]Status: DisposedITAT Mumbai16 Jul 2024AY 2011-12

Bench: SHRI AMIT SHUKLA (Judicial Member)

Section 133(6)Section 143(3)Section 147Section 148Section 194JSection 9(1)Section 9(1)(vii)

investment revenue from the accepted clients. The meaning of "Fees for Technical Services" has been explained in Explanation 2 to Section 9(1)(vii) of the IT. Act. As per the Explanation, fees for technical services means any consideration for rendering of any managerial, technical or consultancy services ... nature. The nature of the consultancy services provided by the appellant was non technical consultancy services. Thus, as per the Explanation 2 to Section 9(1)(vii) of the IT Act, the consultancy services provided by the appellant are covered under "Fees for Technical Services" and therefore, the consultancy fees

DCIT It 3 2 1 Mumbai, Air India Building Mumbai vs. Mckinsey and Company Lme Limited, U.K

In the result, appeal of the revenue is dismissed and cross- objection filed by the assessee is dismissed

ITA 2759/MUM/2023[2016-17]Status: DisposedITAT Mumbai15 Jul 2024AY 2016-17

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sandeep Singh Karhail, Hon’Ble

For Appellant: Shri Poras Kaka & Shri Divesh Chawal, A/RsFor Respondent: Shri Anil Sant, Sr. D/R

Section 9(1)(vii)

decision making from financial to legal issues and are in the nature of consultancy services and treated as fees for technical services under section 9(1)(vii) of the Income Tax Act, 1961. Therefore the Ld. CIT(A) erred in the nature of consultancy services to the borrowed services fees

DCIT, Circle-2(1)(1), Ahmedabad vs. Elitecore Technologies Private Limited, Ahmedabad

In the result, the appeal filed by the Revenue is dismissed

ITA 1728/AHD/2019[2011-12]Status: DisposedITAT Ahmedabad12 Jul 2024AY 2011-12

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं /Ita No.1728/Ahd/2019 "नधा"रण वष" /Assessment Year : 2011-12 The Dy.Cit Elitecore Technologies Pvt.Ltd. Circle-2(1)(1) बनाम/ (Now Merged With Sterlite Ahmedabad Technolgies Limited) V/S. 904, Silicon Tower, B/H. Pariseema Building Off. C.G. Road Ahmedabad, Gujarat-380 009 "थायी लेखा सं./Pan: Aaace 6815G (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri Dhinal Shah, Ar Revenue By : Shri Atul Pandey, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 27/06/2024 घोषणा क" तार"ख /Date Of Pronouncement: 12/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Revenue As Against The Order Passed By The Ld.Commissioner Of Income-Tax(Appeals)-10, Ahmedabad [Hereinafter Referred To As “The Ld.Cit(A)”], Dated 04/09/2019, Arising Out Of The Assessment Order Passed By The Assessing Officer (Ao) Under Section 143(3) Dcit Vs. Elitecore Technologies Pvt.Ltd. Asst. Year : 2011-12

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri Atul Pandey, Sr.DR

Section 143(2)Section 143(3)Section 195Section 250Section 40Section 92C

said order, the Ld.CIT(A) concluded that providing certificates cannot be compared to providing technical services as per section 9(1)(vii) of the Act and therefore assessee is not in default. The Ld.CIT(A) also stated that in case of appeal for A.Y. 2012-13 relating to Sophos Technologies ... product certification, which include evaluating technical quality and issuing certificates, do not fall under the definition of Fees for Technical Services as per Section 9(1)(vii) of the Act. This view is consistent with the Ld.CIT(A)’s findings and supported by the judgments cited by the Ld.AR, particularly

M/S. Steer America Inc., United States vs. The Deputy Commissioner of Income Tax, International Taxation Circle -1(2), Bengaluru

In the result, both the appeals of the assessee are partly allowed

ITA 833/BANG/2024[2014-15]Status: DisposedITAT Bangalore10 Jul 2024AY 2014-15

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Sri Vasanth Kumar, A.RFor Respondent: Ms. Anjala Sahu, D.R

Section 144CSection 147Section 148

Indian entity was passed, wherein the payment to foreign entity was held to be FTS as per section 9(1)(vii) of the Act as well as India-US DTAA and the Indian entity was treated as assessee in default for non-deduction of TDS. Since present assessee being foreign ... assessee to its foreign Agent for arranging export sales and recovery of payments could not be regarded as fee for technical services under section 9(1)(vii) of the I.T. Act. The High Court held that the skill, business acumen and knowledge acquired by the non-resident were

M/S. Steer America Inc., United States vs. The Deputy Commissioner of Income Tax, International Taxation Circle -1(2), Bengaluru

In the result, both the appeals of the assessee are partly allowed

ITA 832/BANG/2024[2013-14]Status: DisposedITAT Bangalore10 Jul 2024AY 2013-14

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Sri Vasanth Kumar, A.RFor Respondent: Ms. Anjala Sahu, D.R

Section 144CSection 147Section 148

Qai India Ltd., New Delhi vs. DCIT, Circle- 21(2), New Delhi

In the result, the appeal of assessee is allowed for statistical purpose

ITA 1033/DEL/2018[2013-14]Status: DisposedITAT Delhi10 Jul 2024AY 2013-14

Bench: Dr. B.R.R. Kumar & Sh. Sudhir Kumarassessment Year: 2013-14 Qai India Ltd. Vs. Dcit 1010-12, Ansal Towers, 38, Circle -21(2) Nehru Place, New Delhi- New Delhi 110019 Pan No.Aaacq0883C (Appellant) (Respondent) Appellant By Sh. Ved Jain, Ar Supriya Mehta, Ar Respondent By Sh. Amaninder Singh, Sr. Dr Date Of Hearing: 04/06/2024 Date Of Pronouncement: 10/07/2024 Order Per Sudhir Kumar, Jm:

Section 143(2)Section 143(3)Section 195Section 40

outside India, thus income of non-resident is not liable for deduction of tax at source in India as per the provision of section 9(1) (vii)(b) of the Act. He has further submitted that the source of income was located outside India and the payments have been made ... seven seriously contended the payment to foreign commission agent was not taxable in India." In this context, we would refer to Section 9 [1] (vii) (b) of the Act. Sub-section [1] of Section 9 en situations under which the income shall be deemed to accrue or arise in India

Deutsche Equities India Pvt. Ltd., Mumbai vs. Addl.C.I.T. RG. 4(1), Mumbai

ITA 8354/MUM/2011[2005-06]Status: DisposedITAT Mumbai08 Jul 2024AY 2005-06

For Appellant: Shri Anil SantFor Respondent: Shri P.J. Pardiwala

Section 143(3)Section 14ASection 40Section 92D

paid to stock exchanges since the same were not in the nature of fee for technical services as defined in Explanation 2 to Section 9(1)(vii) of the Act. Therefore, disallowance under Section ... above kind that, according to us, should come within the ambit of the expression "technical services" appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered

DCIT 4(1), Mumbai vs. Deutsche Equities India P.Ltd, Mumbai

ITA 8033/MUM/2011[2005-06]Status: DisposedITAT Mumbai08 Jul 2024AY 2005-06

Bench: SHRI B.R. BASKARAN, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Anil SantFor Respondent: Shri P.J. Pardiwala

Section 143(3)Section 14ASection 40Section 92D

paid to stock exchanges since the same were not in the nature of fee for technical services as defined in Explanation 2 to Section 9(1)(vii) of the Act. Therefore, disallowance under Section 40(a)(ia) of the Act was not CO No. 227/Mum/2012 (Assessment Year: 2005-06) warranted ... above kind that, according to us, should come within the ambit of the expression "technical services" appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered

Springer Nature Customer Service Center Gmbh, Germany vs. ACIT Circle 3(1)(2) Intl Tax New Delhi, Intl Tax New Delhi

In the result, both the appeals of the assessee are allowed

ITA 3307/DEL/2023[2021-22]Status: DisposedITAT Delhi05 Jul 2024AY 2021-22

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

For Appellant: Sh. Himanshu Sinha, Adv. &For Respondent: Sh. Vijay B. Vasanta, CIT-DR

Section 143(3)Section 234ASection 234BSection 270A

technical services [in short, “FTS”], instead of a royalty. The CIT(A), accordingly, took recourse to the provisions of Section 9(1)(vii) of the Act and Article 12(4) of the DTAA. 5.1 Insofar as the second and third additions were concerned, the CIT(A) confirmed the same ... Springer Nature Customer Service Center categories, i.e., managerial, technical or consultancy services. This is evident upon a plain reading of the provisions of Section 9(1) (vii)(b) read with explanation 2 of the Act and Article 12(4) of the DTAA. 15.2 Section 9 creates a deeming fiction

Springer Nature Customer Service Center Gmbh, Germany vs. ACIT-3(1)(2) Int. Taxation, Delhi

In the result, both the appeals of the assessee are allowed

ITA 2420/DEL/2023[2020-21]Status: DisposedITAT Delhi05 Jul 2024AY 2020-21

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

For Appellant: Sh. Himanshu Sinha, Adv. &For Respondent: Sh. Vijay B. Vasanta, CIT-DR

Section 143(3)Section 234ASection 234BSection 270A

Rane Engine Valve Ltd, Chennai vs. DCIT Corporate Circle-5(1), Chennai

In the result, the appeals filed by the assessee for assessment year 2012-13 in ITA No

ITA 885/CHNY/2020[2015-16]Status: DisposedITAT Chennai03 Jul 2024AY 2015-16

Bench: Shri Mahavir Singhand Shri Amitabh Shukla

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri G. Suresh, JCIT

Section 143(3)

managerial, technical or consultancy knowledge and hence does not fall within the meaning of "fee for technical service" as per explanation 2 to section 9(1)(vii) of the Act. 2.1.3 Without prejudice to the above, even if the above services are considered as technical in nature ... have appreciated that even if the payment is treated as fee for technical services, it is not chargeable to tax in India under section 9(1)(vii)(b) of the Act, as it relates to services utilized for the purpose of making or earning income from any source of income