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“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)

ACIT, Circle-26(1), New Delhi vs. Value First Digital Media Pvt. Ltd., New Delhi

In the result, ITA No. 3143/Del/2019 [A

ITA 5127/DEL/2019[2016-17]Status: DisposedITAT Delhi08 Feb 2023AY 2016-17

Bench: Shri Narender Kumar Choudhry & Dr. B.R.R. Kumar

Section 250Section 40Section 72ASection 9(1)(vi)

server hosting services are not covered as FTS criteria of possession, control, location indirect use etc., as explained by Explanation 5 to Section 9(1)(vii) which has no effect in the case in hand. 17. Our attention was drawn by the learned Sr. Counsel Shri Ajay Vohra

ACIT, Circle-26(1), New Delhi vs. Value First Digital Media Pvt. Ltd., New Delhi

In the result, ITA No. 3143/Del/2019 [A

ITA 3143/DEL/2019[2012-13]Status: DisposedITAT Delhi08 Feb 2023AY 2012-13

Bench: Shri Narender Kumar Choudhry & Dr. B.R.R. Kumar

Section 250Section 40Section 72ASection 9(1)(vi)

server hosting services are not covered as FTS criteria of possession, control, location indirect use etc., as explained by Explanation 5 to Section 9(1)(vii) which has no effect in the case in hand. 17. Our attention was drawn by the learned Sr. Counsel Shri Ajay Vohra

Umw Sher (L) Limited, New Delhi vs. Assesising Officer, International Taxation Circle-3(1)(1), New Delhi

In the result, appeals are allowed, as indicated above

ITA 570/DEL/2021[2017-18]Status: DisposedITAT Delhi01 Feb 2023AY 2017-18

Bench: Shri Saktijit Dey & Dr. B.R.R. Kumar

Section 115ASection 143(3)Section 144C(13)Section 44BSection 44DSection 9(1)(vi)Section 9(1)(vii)

JEPL was of the view that the amounts received by the assessee are in the nature of Fees for Technical Services (FTS) under section 9(1)(vii) read with section 44D and 115A of the Act. Accordingly, he completed the assessments by treating the amounts received by the assessee

Umw Sher (L) Limited, New Delhi vs. Assesising Officer, International Taxation Circle-3(1)(1), New Delhi

In the result, appeals are allowed, as indicated above

ITA 569/DEL/2021[2012-13]Status: DisposedITAT Delhi01 Feb 2023AY 2012-13

Bench: Shri Saktijit Dey & Dr. B.R.R. Kumar

Section 115ASection 143(3)Section 144C(13)Section 44BSection 44DSection 9(1)(vi)Section 9(1)(vii)

JEPL was of the view that the amounts received by the assessee are in the nature of Fees for Technical Services (FTS) under section 9(1)(vii) read with section 44D and 115A of the Act. Accordingly, he completed the assessments by treating the amounts received by the assessee

Inteva Products Netherlands Bv, Netherlands vs. ACIT, Circle- 2(1)(1), Intl. Taxation, New Delhi

In the result, the appeal is party allowed

ITA 7545/DEL/2017[2014-15]Status: DisposedITAT Delhi31 Jan 2023AY 2014-15

Bench: Shri G.S. Pannu & Shri Saktijit Deyassessment Year: 2014-15

Section 143(3)Section 144CSection 9(1)(vii)

assessee, the Assessing Officer was not convinced. He observed that the payment received by the assessee will qualify as FTS, both under Section 9(1)(vii) of the Act as well as under Indian-Netherlands DTAA as they are in the active of management and consultancy services. Accordingly, he brought

Kony Inc., Usa vs. ACIT, Circle- 2(1)(2), Intl. Taxation, New Delhi

In the result, appeal is allowed, as indicated above

ITA 616/DEL/2021[2017-18]Status: DisposedITAT Delhi11 Jan 2023AY 2017-18

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2015-16

Section 143(3)Section 144C(13)Section 9(1)(vi)

receipts from annual maintenance charges of the software are in the nature of FIS/FTS, both under the tax treaty as well as under section 9(1)(vii) of the Act. Accordingly, he brought to tax the amount of Rs.1,23,20,383/-. Learned DRP, while deciding the objections ... from annual maintenance charges is in the nature of FIS under Article 12(4)(a) of India – USA DTAA as well as under section 9(1)(vii) of the Act. However, while deciding the issue of taxability of receipts from 6 | P a g e & 616/Del/2021 granting of licence

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Gurgaon vs. DCIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 4608/DEL/2019[2013-14]Status: DisposedITAT Delhi11 Jan 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Saktijit Dey

Section 144C(3)

amount received towards provision of Management Support Services as FTS under Article 12(4)(b) of Indian-Singapore DTAA as well as under Section 9(1)(vii) of the Act. Accordingly, he brought the amount of Rs.6,83,22,262 to tax. While deciding the issue in appeal, learned Commissioner ... same approach as in assessment year 2013-14 and held that the amount received is in the nature of FTS, both under Section 9(1)(vii) as well as under Article 12(4)(b) of the India-Singapore DTAA. However, while deciding the issue in appeal, learned Commissioner (Appeals) held

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Singapore vs. ACIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 2986/DEL/2019[2014-15]Status: DisposedITAT Delhi11 Jan 2023AY 2014-15

Bench: Shri G.S. Pannu & Shri Saktijit Dey

Section 144C(3)

amount received towards provision of Management Support Services as FTS under Article 12(4)(b) of Indian-Singapore DTAA as well as under Section 9(1)(vii) of the Act. Accordingly, he brought the amount of Rs.6,83,22,262 to tax. While deciding the issue in appeal, learned Commissioner ... same approach as in assessment year 2013-14 and held that the amount received is in the nature of FTS, both under Section 9(1)(vii) as well as under Article 12(4)(b) of the India-Singapore DTAA. However, while deciding the issue in appeal, learned Commissioner (Appeals) held

Kony Inc., Usa vs. DCIT, Circle- 2(1)(2), Intl. Taxation, New Delhi

In the result, appeal is allowed, as indicated above

ITA 7462/DEL/2018[2015-16]Status: DisposedITAT Delhi11 Jan 2023AY 2015-16

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2015-16

Section 143(3)Section 144C(13)Section 9(1)(vi)

receipts from annual maintenance charges of the software are in the nature of FIS/FTS, both under the tax treaty as well as under section 9(1)(vii) of the Act. Accordingly, he brought to tax the amount of Rs.1,23,20,383/-. Learned DRP, while deciding the objections ... from annual maintenance charges is in the nature of FIS under Article 12(4)(a) of India – USA DTAA as well as under section 9(1)(vii) of the Act. However, while deciding the issue of taxability of receipts from 6 | P a g e & 616/Del/2021 granting of licence

Yamazen Machinery Tools India P.Ltd, New Delhi vs. ACIT, Circle-27(2), New Delhi

In the result, the appeal is partly allowed

ITA 582/DEL/2020[2015-16]Status: DisposedITAT Delhi10 Jan 2023AY 2015-16

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2015-16

Section 192Section 195Section 40Section 9

under section 192 of the Act, hence, cannot be treated as FTS under 11 | P a g e AY: 2015-16 section 9(1)(vii) of the Act and Article 12 of the tax treaty. Accordingly, there was no obligation on the part of the assessee to withhold

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)

Whether the income of the assessee is of the nature of “fee for technical services” under the section 9(1)(vii) of the Income Tax Act 1961? This is required to be determined in view of the fact that, where a specific provision in the Act is laid down ... consultancy also necessarily entails human intervention:. Consequently, applying the rule of noscitur a sociis, the word — "technical" as appearing in Explanation 2 to Section 9 (1) (vii) would also have to be construed as involving a human element. In the facts of the present appeals, the services rendered qua interconnection/Port

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)

Whether the income of the assessee is of the nature of “fee for technical services” under the section 9(1)(vii) of the Income Tax Act 1961? This is required to be determined in view of the fact that, where a specific provision in the Act is laid down ... consultancy also necessarily entails human intervention:. Consequently, applying the rule of noscitur a sociis, the word — "technical" as appearing in Explanation 2 to Section 9 (1) (vii) would also have to be construed as involving a human element. In the facts of the present appeals, the services rendered qua interconnection/Port

Owens-Corning(Singapore)Pte.Ltd., Mumbai vs. The Deputy Commissioner of Income-Tax (Internatioal Taxation) Circle-3(2)(2), Mumbai

In the result, appeal of assessee is allowed

ITA 6529/MUM/2018[2015-16]Status: DisposedITAT Mumbai26 Dec 2022AY 2015-16

Bench: Shri Amit Shukla & Shri Gagan Goyal

For Appellant: Ms. Megha Shah, ARFor Respondent: Sh. Soumendu Kumar Dash, Sr. DR
Section 234Section 234BSection 9(1)(vii)

9, 14, 87,876 during the year under consideration by treating the same as fees for technical services in terms of section 9(1)(vii) of the Income-tax Act, 1961 as well as Article 12 of the Double Taxation Avoidance Agreement entered between India and Singapore (India-Singapore ... assessee’s receipts as FTS as per Article-12(4)(a) of the DTAA between India and Singapore. Consequently taxed the same under section 9(1)(vii) of the I.T. Act read with Article-12(4)(a) of the DTAA between India and Singapore. 12. Against this order assessee preferred

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)

support fees. The AO opined that payment made by the assessee was in the nature of FTS as defined in Explanation 2 to section 9(1)(vii) of the Act. The Tribunal observed that as per terms of agreement, EMCAP had to provide management consulting, functional advice, administrative, technical, professional ... vide draft assessment order treated the Management Services Fees as fees for technical services under section 9(1)(vii) of the Act and Article 13 of India France DTAA. However, in further proceedings, the learned DRP has held the fees received by the assessee under the Management Services Agreement

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)

support fees. The AO opined that payment made by the assessee was in the nature of FTS as defined in Explanation 2 to section 9(1)(vii) of the Act. The Tribunal observed that as per terms of agreement, EMCAP had to provide management consulting, functional advice, administrative, technical, professional ... vide draft assessment order treated the Management Services Fees as fees for technical services under section 9(1)(vii) of the Act and Article 13 of India France DTAA. However, in further proceedings, the learned DRP has held the fees received by the assessee under the Management Services Agreement

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)

support fees. The AO opined that payment made by the assessee was in the nature of FTS as defined in Explanation 2 to section 9(1)(vii) of the Act. The Tribunal observed that as per terms of agreement, EMCAP had to provide management consulting, functional advice, administrative, technical, professional ... vide draft assessment order treated the Management Services Fees as fees for technical services under section 9(1)(vii) of the Act and Article 13 of India France DTAA. However, in further proceedings, the learned DRP has held the fees received by the assessee under the Management Services Agreement

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)

support fees. The AO opined that payment made by the assessee was in the nature of FTS as defined in Explanation 2 to section 9(1)(vii) of the Act. The Tribunal observed that as per terms of agreement, EMCAP had to provide management consulting, functional advice, administrative, technical, professional ... vide draft assessment order treated the Management Services Fees as fees for technical services under section 9(1)(vii) of the Act and Article 13 of India France DTAA. However, in further proceedings, the learned DRP has held the fees received by the assessee under the Management Services Agreement

General Electric Company, Mumbai vs. Asst DIT (It) 3(1), Mumbai

In the result, the appeal of the assessee for Assessment Year 2001-02 is allowed and the appeal of revenue for A

ITA 82/MUM/2011[2001-02]Status: DisposedITAT Mumbai23 Dec 2022AY 2001-02

Bench: Shri Aby T Varkey & Shri M Balaganeshm/S. General Electric Company, C/O Kpmg, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai-400011 Pan Aaacg5399M …Appellant. Vs. Asst. Director Of Income Tax, (International Taxation)-3(1), Room No.136, 1St Floor, Scindia House, N M Road Ballard Estate, Mumbai-400038. ….Respondent. Dy. Commissioner Of Income Tax, International Taxation-3(1), Mumbai-400 038 ….Appellant. Vs. M/S. General Electric Company, Mahalaxmi, Mumbai. ….Respondent. Assessee By : Shri Percy Pardiwala, Ms. Fereshte Sethna, Shri Mrunal Parekh, Shri Abhishek Tilak & Shri Ameya Pany. Revenue By : Ms. Surabi Sharma, Cit D.R. Shri Sunil Umap, Cit- D.R. Date Of Hearing : 15.12.2022 Date Of Pronouncement : 23.12.2022

For Appellant: Shri Percy PardiwalaFor Respondent: Ms. Surabi Sharma, CIT
Section 139Section 143Section 143(3)Section 147Section 148Section 5Section 9

services are rendered from outside India, such payments will be income deemed to accrue or arise in India as per the provisions of Section 9(1)(vii) of the Income Tax Act, 1961. Such amounts will also be taxable as fees for technical services or business income depending upon

DDIT (It) 3(1), Mumbai vs. General Electric Company, Mumbai

In the result, the appeal of the assessee for Assessment Year 2001-02 is allowed and the appeal of revenue for A

ITA 432/MUM/2011[2001-02]Status: DisposedITAT Mumbai23 Dec 2022AY 2001-02

Bench: Shri Aby T Varkey & Shri M Balaganeshm/S. General Electric Company, C/O Kpmg, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai-400011 Pan Aaacg5399M …Appellant. Vs. Asst. Director Of Income Tax, (International Taxation)-3(1), Room No.136, 1St Floor, Scindia House, N M Road Ballard Estate, Mumbai-400038. ….Respondent. Dy. Commissioner Of Income Tax, International Taxation-3(1), Mumbai-400 038 ….Appellant. Vs. M/S. General Electric Company, Mahalaxmi, Mumbai. ….Respondent. Assessee By : Shri Percy Pardiwala, Ms. Fereshte Sethna, Shri Mrunal Parekh, Shri Abhishek Tilak & Shri Ameya Pany. Revenue By : Ms. Surabi Sharma, Cit D.R. Shri Sunil Umap, Cit- D.R. Date Of Hearing : 15.12.2022 Date Of Pronouncement : 23.12.2022

For Appellant: Shri Percy PardiwalaFor Respondent: Ms. Surabi Sharma, CIT
Section 139Section 143Section 143(3)Section 147Section 148Section 5Section 9

services are rendered from outside India, such payments will be income deemed to accrue or arise in India as per the provisions of Section 9(1)(vii) of the Income Tax Act, 1961. Such amounts will also be taxable as fees for technical services or business income depending upon

Amee Foster Wheeler India Pvt. Ltd., Chennai vs. ACIT, Corporate Range-1, Chennai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 680/CHNY/2020[2014-15]Status: DisposedITAT Chennai22 Dec 2022AY 2014-15

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.: 680/Chny/2020 िनधा"रण वष"/Assessment Year: 2014-15 Amec Foster Wheeler India Pvt. The Acit (Osd), Ltd., Vs. Corporate Range -1, Zenith Building, 6Th Floor, Chennai Ascendas It Park, Csir Road, Taramani, Chennai – 600 113. Pan : Aaacf 3204C (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Ms. K.Amulya, Ca & Ms. V. Rajeswari, Ca ""यथ" क" ओर से/Respondent By : Shri S. Marudhu Pandyan, Cit सुनवाई क" तार"ख/Date Of Hearing : 22.12.2022 घोषणा क" तार"ख/Date Of Pronouncement : 22.12.2022 आदेश /O R D E R Per Mahavir Singh: This Appeal By Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Appeals)-4, Chennai In Ita No.479/16-17/Cit(A)-4/A.Y.2014-15 Dated 06.02.2020. The Assessment Was Framed By The Acit(Osd), Corporate Range-1, Chennai For The Assessment Year 2014-15, U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’), Vide Order Dated 29.12.2016. 2. The First Issue In This Appeal Of Assessee Is As Regards To The Order Of Cit(A) Confirming The Action Of Ao In Making Disallowance Of Cost Incurred In Connection With Off The Shelf Software Products Treating The Same As Royalty Under The Provisions Of The Act Read With Relevant Treaties. For This, Assessee Raised Ground Nos. 2 To 4 But The Relevant Ground Is Ground No.2, Which Reads As Under:- “2. The Ld. Cit(A) & Ld. Ao Erred In Non-Consideration Of The Fact That The Said Expenditure Merely Represents Cost To Cost Reimbursement Of Expenditure Incurred On Behalf Of The Appellant By Afwg Overseas Entities & Therefore, No Income Arises In The Hands Of Afwg Entities Necessitating The Obligation To Withhold Taxes On The Part Of The Appellant Under The Provisions Of The Act.”

For Appellant: Ms. K.Amulya, CA &For Respondent: Shri S. Marudhu Pandyan, CIT
Section 143(3)Section 40Section 9(1)(vi)Section 9(1)(vii)

should be brought to tax. The AO relied on the retrospective amendment brought in by the Finance Act, 2007 including an Explanation to section 9(1)(vii)(b) of the Act, thereby invoking the provisions of section 40(a)(i) of the Act disallowed the above amount and added back