INTEROUTE COMMUNICATIONS LTD, MUMBAI V. DDIT (IT) RG 3(1), MUMBAI

ITA 4976/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1684 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 31-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 31-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASBIR CHOUHAN
• Assessee Lawyers: RAVI SAWNA
• Keywords: Business income; Double taxation relief; Permanent establishment
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L , MUMBAI , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO. : 497 6 /MUM/20 1 4 (ASSESSMENT YEAR: 201 0 - 1 1 ) INTEROUTE COMMUNICATIONS LTD , C/O PRICEWATER HOUSE COOPERS P LTD., PWC HOUSE, PLO 18/A, GURU NANAK ARD (STATION RD BANDRA (WEST), MUMBAI - 400 050 VS DDIT (IT) RG. - 3(1), SCINDIA HOUSE, N M MARG, BALLARD ESTATE, MUMBAI - 400 038 (APPELLANT) (RESPONDENT) (APPELLANT BY ) : SHRI DHANESH BAFNA & SHRI RAVI SAWNA (RESPONDENT BY ) : SHRI JASBIR CHOUHAN /DATE OF HEARING : 0 9 - 1 1 - 2016 / DATE OF PRONOUNCEMENT : 0 9 - 11 - 2016 ORDER , : PER AMIT SHUKLA, J .M. : THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 28.03.2014 , PASSED BY LD. CIT(APPEALS), MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 144C(3) R.W.S. 143(3) FOR THE ASSESSMENT YEAR 2010 - 11. IN THE GROUNDS OF APPEAL THE ASSESSEE HAS RAI SED FOLLOWING GROUNDS: - 2 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 GROUND 1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE LD. DIT(INTERNATIONAL TAX) RANGE 3 - (1) (THE AO) OF TREATING THE REVENUES OF RS.12,65,32,280 RECEIVED FROM THE INDIAN CUSTOMERS DURING THE YEAR UNDER CONSIDERATION AS ROYALTY AS PER THE PROVISIONS OF SECTION 9 OF THE INCOME TAX ACT, 1961 (THE ACT) AND THE TREATY BETWEEN INDIA AND UNITED KINGDOM (DTAA), WITHOUT APPRECIATING THAT THE REVENUE IS IN THE NATURE OF BUSINESS INCOME NOT TAXABLE IN INDIA, SINCE THE APPELLANT DOES NOT HAVE A PERMANENT ESTABLISHMENT (PE) IN INDIA. THE APPELLANT PRAYS THAT THE ACTION OF THE AO/ CIT ( A) WITH RESPECT TO THE ABOVE GROUND BE QUASHED. GROUND 2 : ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE LD. AO IN ALTERNATIVELY TREATING THE REVENUES OF RS.12,65,32,280 RECEIVED FROM INDIAN CUSTOMERS DURING THE YEAR UNDER CONSIDERATION AS FEES FOR TECHNICAL SERV ICES AS PER THE PROVISIONS OF SECTION 9 OF THE ACT AND THE DTAA, WITHOUT APPRECIATING THAT THE REVENUE IS IN THE NATURE OF BUSINESS INCOME NOT TAXABLE IN INDIA, SINCE THE APPELLANT DOES NOT HAVE A PERMANENT ESTABLISHMENT (PE) IN INDIA. THE APPELLANT PRA YS THAT THE ACTION OF THE AO/CIT(A) WITH RESPECT TO THE ABOVE GROUND BE QUASHED. GROUND 3 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN LEVYING INTEREST UNDER 3 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 SECTION 234B OF THE ACT AMOUNTING TO RS.17,98,349 WITHOUT APPRECIATING THAT THE ENTIRE INCOME OF THE APPELLANT IS SUBJECT TO TDS. THE APPELLANT PRAYS THAT THE ACTION OF THE AO/CIT(A) WITH RESPECT TO THE ABOVE GROUND BE QUASHED. 3. AT THE OUTSET THE LD. COUNSEL , SHRI DHANESH BAFNA AND SHRI RAVI SAWNA , AFTER EXPLAINING THE ENTIRE FACTS AND ISSUES INVOLVED SUBMITTED THAT , THE MAIN ISSUE IN THE GROUNDS RAISED BY THE ASSESSEE ARE SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2009 - 10. HE SUBMITTED THAT, EVEN THE LD. CIT ( A) HAS REFERRED AND RELIED UPON THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2009 - 10. THUS, MATTER SHOULD BE DECIDED IN ACCORDANCE WITH THE JUDICIAL PRECEDENCE OF THE EARLIER YEAR. 4. ON THE OTHER HAND, LD. CIT DR, THOUGH ADMITTED THAT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE , HOWEVER, HE STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT ( A). 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE IMP UGNED ORDER AS WELL AS TRIBUNAL ORDER FOR THE EARLIER YEAR, WE FIND THAT, THE MAIN ISSUE INVOLVED HERE IS , WHETHER THE SUM OF RS.12,65,32,280/ - RECEIVED BY THE ASSESSEE FROM THE INDIAN CUSTOMERS CAN BE TAXED AS ROYALTY IN INDIA OR NOT . 6. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING INTERNATIONAL COMMUNICATION NETWORK CONNECTIVITY/ FACILITY TO VARIOUS TELECOM OPERATORS AROUND THE WORLD. IT HAS EARNED REVENUE FROM THE INDIAN CUSTOMERS, MAINLY FROM PROVIDING TH E VOICE S ERVICES OUTSIDE IN DIA. THE ASSESSING OFFICER HELD THAT THE ASSESSEE IS NOT MAINLY PROVIDING PORT COMMUNICATION BUT IT IS 4 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 PROVIDING USAGE OF ITS FACILITIES/ INFRASTRUCTURE ENABLING ITS CUSTOMERS TO INTERCONNECT WITH EACH OTHER. THIS INCLUDES PROPRIETARY SOFTWARE, HARDWARE, T ECHNICAL EXPERTISE AND OTHER INTELLECTUAL PROPRIETARY RIGHTS HELD BY THE ASSESSEE. IT IS NOT MAINLY PROVIDING STANDARD FACILITY BUT IT IS ACTIVELY PROVIDING THE USAGE OF ITS TYPICAL HARDWARE AND SOFTWARE PROPRIETARY PRODUCT TO FACILITATE AND LEVERAGE THE C ORE BUSINESS OF ITS CUSTOMERS. THUS, THE USAGE OF SUCH FACILITIES AMOUNTS TO USAGE OF ACTUAL PROPRIETARY RIGHTS AND, THEREFORE, THE PAYMENTS RECEIVED BY THE ASSESSEE IS TAXABLE IN THE NATURE OF ROYALTY 7. THE LD. CIT(A) HAVE CONFIRMED THE SAID ACTION FO LLOWING HIS EARLIER ORDER FOR THE ASSESSMENT YEAR 2009 - 10. THE RELEVANT FINDING OF THE LD. CIT(A) IN THIS REGARD READS AS UNDER: - I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APPELLANTS AR SUBMISSION HAVING CONSIDERED BOTH, I FIND THAT THE APPELLANT IS TRYING TO MISLEAD THE INCIDENCE OF CHARGEABILITY OF TAX ON RECEIPT ARISEN FROM THE INDIAN CUSTOMER TO THE APPELLANT ON MERELY STATING THAT THE APPELLANT IS A NON - RESIDENT AND ALL THE INFRASTRUCTURE IS ALSO SITUATED OUTSIDE INDIA. HENCE THE SAME CANNOT B E TERMED AS ROYALTY OR FEE FOR TECHNICAL SERVICES. I ALSO FIND THAT SIMILAR ISSUE IN THE APPELLANTS OWN CASE FOR A.Y. 2009 - 10 HAS BEEN DECIDED BY ME AGAINST THE APPELLANT VIDE THIS OFFICE ORDER NO.CIT(A) - 10/DDIT(IT) - 3(1)/IT - 453/11 - 12 DATED 31.10.2013 . FOR THE SAKE OF CLARIFY, THE OPERATIVE PORTION OF THE SAID ORDER IS EXTRACTED HEREIN BELOW: - 7. I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APPELLANTS AR SUBMISSION. HAVING CONSIDERED BOTH, I FIND THAT THE APPELLANTS IS TRYING TO MISLEAD THE INCI DENCE OF CHARGEABILITY OF TAX ON RECEIPT ARISING FROM THE INDIAN CUSTOMER TO THE APPELLANT ON MERELY STATING THAT THE APPELLANT IS A NON - RESIDENT AND ALL THE INFRASTRUCTURE IS ALSO SITUATED OUTSIDE INDIA. HENCE THE SAME CANNOT BE TERMED AS ROYLATY OR FE E FOR TECHNICAL SERVICES,. BUT HAVING TAKEN NOTE OF THE AOS ORDER, I AM COMPLETELY IN AGREEMENT WITH THE AOS FINDING THAT THE ENTIRE PAYMENT WHICH HAS BEEN MADE BY THE INDIAN CUSTOMERS TO THE APPELLANT IS IN THE NATURE OF ROYALTY OR FEE FOR TECHNIC AL SERVICES AS THE APPELLANT IS CREATING A PRODUCT WHICH ALLOWS ITS CUSTOMERS 5 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 IN INDIA TO LINK ITS NETWORKS T THAT OF OTHER NETWORKS IN EUROPE / USA. IT IS NOT A SIMPLE CASE WHERE A CUSTOMER IS USING A STANDARD FACILITY PROVIDED BY SIMPLE CASE WHERE A CUS TOMER IS USING A STANDARD FACILITY PROVIDED BY INTEROUTE I.E. THE APPELLANT. THE APPELLANT IS PROVIDING ENTIRE SERVICES TO THE INDIAN CUSTOMERS TO MAKE THEM EFFECTIVELY ENABLE THEM TO INTERCONNECT WITH THE NET WORK OF EUROPE AND USA. THE ENTIRE SERVICES WH ICH HAS BEEN PROVIDED BY THE APPELLANT IS HIGHLY TECHNICAL AND IS IN THE NATURE OF SERVICES WHICH HAS BEEN RENDERED BY THE APPELLANT TO THE INDIAN CUSTOMERS AND FOR THAT ONLY SUCH PAYMENTS HAVE BEEN MADE. HAVING TAKEN NOTE OF THE ARTICLE OF INDIA - UK - DTAA O N ROYALTY AND THE FEE FOR TECHNICAL SERVICES AND ALSO TO SEC. 9 OF THE INCOME - TAX ACT, I AM IN COMPLETE AGREEMENT WITH THE AOS FINDING THAT THESE PAYMENTS ARE IN THE NATURE OF ROYALTY OR FEE FOR TECHNICAL SERVICES. ACCORDINGLY, I CONSIDER IT PROPER AND AP PROPRIATE TO HOLD THAT THE REASONING ASSIGNED BY THE AO FOR TAXABILITY OF SUCH RECEIPT IN THE HANDS OF THE APPELLANT IN INDIA IS COMPLETELY JUSTIFIED AND CORRECT AS PER THE PROVISIONS OF LAW. ACCORDINGLY, THE ADDITION SO MADE BY THE AO OF RS.6,15,32,756/ - IS CONFIRMED. THE APPELLANTS THESE GROUNDS OF APPEAL ARE DISMISSED. 8. THUS HAVING TAKEN NOTE TO MAY OWN ORDER EXTRACTED AS ABOVE, AND ALSO AFTER HAVING TAKEN NOTE OF THE AOS ORDER WHEREIN I FIND THAT SIMILAR SET OF FACTS AND SUBMISSIONS OF THE APPELLAN TS CASE IN THE ASSESSMENT YEAR 2009 - 10 ALSO, I AM COMPLETELY IN AGREEMENT WITH THE AOS FINDING THAT THE ENTIRE PAYMENT WHICH HAS BEEN MADE BY THE INDIAN CUSTOMERS TO THE APPELLANT IS IN THE NATURE OF ROYALTY OR FEE FOR TECHNICAL SERVICES AS THE APPE LLANTS CREATING A PRODUCT WHICH ALLOWS ITS CUSTOMERS IN INDIA TO LINK ITS NETWORKS TO THAT OF OTHER NETWORKS IN EUROPE/USA. IT IS NOT A SIMPLE CASE WHERE A CUSTOMER IS USING A STANDARD FACILITY PROVIDED BY INTEROUTE I.E. THE APPELLANT. THE APPELLANT IS PR OVIDING ENTIRE SERVICES TO THE INDIAN CUSTOMERS TO MAKE THEM EFFECTIVELY ENABLE THEM TO INTERCONNECT WITH THE NET WORK OF EUROPE AND USA. THE ENTIRE SERVICES WHICH HAS BEEN PROVIDED BY THE APPELLANT IS HIGHLY TECHNICAL AND IS IN THE NATURE OF SERVICES WHIC H HAS BEEN RENDERED BY THE APPELLANT TO THE INDIAN CUSTOMERS AND FOR THAT ONLY SUCH PAYMENTS HAVE BEEN MADE. HAVING TAKEN NOTE OF THE ARTICLE OF INDIA - UK - DTAA ON ROYALTY AND FEE FOR TECHNICAL SERVICES AND ALSO TO SEC.9 OF THE INCOME - TAX ACT, I AM IN COMPL ETE AGREEMENT WITH THE AOS FINDING THAT THESE PAYMENTS ARE IN THE NATURE OF ROYALTY OR FEE FOR 6 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 TECHNICAL SERVICES. ACCORDINGLY, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE REASONING ASSIGNED BY THE AO FOR TAXABILITY OF SUCH RECEIPT IN THE HANDS OF THE APPELLANT IN INDIA IS COMPLETELY JUSTIFIED AND CORRECT AS PER THE PROVISIONS OF LAW. ACCORDINGLY, THE ADDITION MADE BY THE AO OF RS.12,65,32,280/ - IS CONFIRMED. THE APPELLANTS THESE GROUNDS OF APPEAL ARE DISMISSED. 8. THE TRIBUNAL IN THE A Y 2009 - 10 HA S DEALT WITH THIS ISSUE AFTER ANLAYSING THE SCOPE AND AMBIT OF ROYALTY AS GIVEN IN ARTICLE 13 OF INDIA - UK - DTAA, WHICH, ADMITTEDLY IS APPLICABLE IN THE CASE OF THE ASSESSEE AND THEREAFTER OBSERVED AND HELD AS UNDER: - 8. SO FAR AS TAXATION OF THE RECEIPTS IN QUESTION AS ROYALTY, UNDER THE ABOVE TREATY PROVISION, IS CONCERNED, IT CAN ONLY BE IN THE TWO SITUATION - (A) FIRST, WHEN IT IS 'A CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF A LITERARY, ARTISTIC OR SCIENTIFIC WORK, INCLUDING CINEMATOGRAPH FILMS OR WORK ON FILMS, TAPE OR OTHER MEANS OF REPRODUCTION FOR USE IN CONNECTION WITH RADIO OR TELEVISION BROADCASTING, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRI AL, COMMERCIAL OR SCIENTIFIC EXPERIENCE'; AND (B) WHEN IT IS A CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT'. HOWEVER, IN ORDER TO UNDERSTAND WHETHER THE INCOME IN QUESTION WILL FIT INTO ANY OF THE A BOVE DESCRIPTIONS, IT IS NECESSARY TO UNDERSTAND THE NATURE OF SERVICE PROVIDED BY THE ASSESSEE. BY WAY OF A DIAGRAM, THIS SERVICE CAN BE DESCRIBED AS FOLLOWS: 7 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 9. ESSENTIALLY, THE ROLE PLAYED BY THE INTERROUTE FACILITY IS CONNECTING THE CALL TO THE END OPERATOR, AND, IN THAT SENSE, IT WORKS LIKE A CLEARING HOUSE. SIMILARLY, IN THE CASE OF INCOMING CALLS, CALLS ORIGINATING FROM EUROPE AND USA, WHICH ARE TO END IN INDIA, ARE ROUTED TO THE RESPECTIVE OPERATORS. IN THE PRESENT FACT SITUATION, THE PAYMENT MAD E BY THE INDIAN ENTITIES CAN BE HELD TO BE ROYALTY ONLY WHEN IT IS PAYMENT FOR SCIENTIFIC WORK, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE. IT IS NO T FOR A PAYMENT FOR A SCIENTIFIC WORK NOR THERE IS I TA NO. 2284/MUM/2014 ASSESSMENT YEAR: 2009 - 10 ANY PATENT, TRADEMARK, DESIGN, PLAN OR SECRET FORMULA OR PROCESS FOR WHICH THE PAYMENT IS MADE. THERE CAN HARDLY BE ANY DISPUTE THAT THE PAYMENT IS MADE FOR A SERVICE, WHICH IS RENDERED WITH THE HELP OF CERTAIN SCIENTIFIC EQUIPMENT AND TECHNOLOGY, RENDERED BY THE ASSESSEE. THE SERVICE IS CONNECTIVITY TO THE TELECOM OPERATORS IN THE CALL END JURISDICTION. THE FACILITY IS A STANDARD FACILITY WHICH IS USED BY OTHE R TELECOM COMPANIES AS WELL. AS FOR THE DEDICATED PORTS, THESE THINGS ONLY PROVIDE A CERTAIN LEVEL OF CAPACITY IN ACCESS BUT THE PAYMENT IS FOR THE SERVICE NEVERTHELESS. MERELY BECAUSE THE PAYMENT INVOLVES A FIXED AS ALSO A VARIABLE PAYMENT DOES NOT ALTER THE CHARACTER OF SERVICE. DEALING WITH SUCH A TYPE OF CONSIDERATION, A COORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE KOTAK MAHINDRA PRIMUS LTD VS DDIT [(2007) 11 SOT 578 (BOM)], HAD HELD THAT 'THIS TYPE OF PRICING OF A SERVICE, BY SEGREGATING THE FIXED AN D VARIABLE PRICE, IS NOT UNUSUAL'. THAT DOES NOT, HOWEVER, ALTER THE CHARACTER OF ARRANGEMENT. THE PAYMENT CONTINUES TO BE FOR SERVICE ALONE. THE ASSESSEE MAY CHARGE A FIXED AMOUNT TO COVER ITS COSTS IN EMPLOYING ENHANCED CAPACITY SO AS NOT TO INCUR LOSSES WHEN THIS CAPACITY IS NOT USED, BUT WHAT THE CUSTOMER IS PAYING FOR IS A SERVICE AND NOT THE USE OF EQUIPMENT INVOLVED IN ADDITIONAL CAPACITY, NOR, AS WE HAVE SEEN ABOVE, FOR ANY SCIENTIFIC WORK, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SECRET FORMUL A OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE. IT CANNOT, THEREFORE, BE AXED AS ROYALTY UNDER ARTICLE 13 OF THE INDO UK TAX TREATY. THE PAYMENT FOR A SERVICE CAN BE BROUGHT TO TAX UNDER ARTICLE 13 ONLY WHEN IT MAKES AVAILABLE THE TECHNOLOGY IN THE SENSE THAT RECIPIENT OF SERVICE IS ENABLED TO PERFORM THE SAME SERVICE WITHOUT RECOURSE TO THE SERVICE PROVIDER. AS HELD BY THIS TRIBUNAL, IN THE CASE OF CESC LTD VS DCIT [(2003) 87 ITD TM 653 (KOL)], '..... IN ORDER TO BE COVERED BY THE PROVISIONS OF ART. 13(4)(C) OF THE INDIA UK DTAA, NOT ONLY THE SERVICES SHOUL D BE OF TECHNICAL IN NATURE BUT SUCH AS TO RESULT IN MAKING THE TECHNOLOGY AVAILABLE TO THE PERSON RECEIVING THE TECHNICAL SERVICES. WE ALSO AGREE THAT MERELY BECAUSE THE PROVISION OF THE SERVICE MAY REQUIRE TECHNICAL INPUT BY THE PERSON PROVIDING THE SERV ICE, IT CANNOT BE SAID THAT TECHNICAL KNOWLEDGE, SKILLS, ETC. ARE MADE AVAILABLE TO THE PERSON PURCHASING THE SERVICE. AS TO WHAT ARE THE CONNOTATIONS OF 'MAKING THE TECHNOLOGY AVAILABLE TO THE RECIPIENT OF TECHNICAL SERVICES', AS IS APPROPRIATELY SUMMED U P IN PROTOCOL TO INDO - US DTAA, 'GENERALLY SPEAKING, TECHNOLOGY WILL BE CONSIDERED 'MADE AVAILABLE' WHEN THE PERSON ACQUIRING THE SERVICE IS ENABLED TO APPLY THE TECHNOLOGY.' IN THE CASE BEFORE US, NO SERVICES ARE MADE AVAILABLE IN THE SENSE THAT THE RECIPI ENT OF SERVICE 8 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 IS ENABLED TO APPLY THE TECHNOLOGY, AND DO THE SAME WORK WITHOUT RECOURSE TO THE SERVICE PROVIDER. THERE IS NO TRANSFER OF TECHNOLOGY HERE, AND IN THAT SENSE TECHNICAL SERVICES ARE NOT MADE AVAILABLE. UNDOUBTEDLY, THE SERVICES RENDERED BY TH E ASSESSEE I.T.A. NO. 2284/MUM/2014 ASSESSMENT YEAR: 2009 - 10 REQUIRES TECHNICAL INPUTS, BUT THAT ALONE, AS WE HAVE SEEN ABOVE, DOES NOT BRING IT IN THE AMBIT OF FEES FOR TECHNICAL SERVICES TAXABLE UNDER A RTICLE 13 OF INDIA UK TAX TREATY. 10. IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW WERE IN ERROR IN HOLDING THAT THE RECEIPTS OF RS 6,15,32,756, FROM INDIAN ENTI TIES ON ACCOUNT OF CONNECTIVITY CHARGES, ARE TAXABLE IN INDIA. WE DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. SINCE SIMILAR FACTS AND ISSUES ARE INVOLVED IN THIS YEAR ALSO, THEREFORE, RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENCE FOR THE EARLIER ASS ESSMENT YEAR , WE ALLOW THE IMPUGNED GROUND NO.1 AS RAISED BY THE ASSESSEE. 9. IN VIEW OF OUR FINDING IN GROUND NO.1, GROUND NO.2 HAS BEEN RENDERED ACADEMIC AND THEREFORE, THE SAME IS DISMISSED AS INFRUCTUOUS. 10. GROUND NO.3 IS CONSEQUENTIAL AND HENCE NO ADJUDICATION IS CALLED FOR. 11. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH N O VEM BER, 2016. SD/ - SD/ - ( ) ( ) ( ASHWANI TANEJA ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 9 TH N O VEM BER, 2016. / COPY TO: - 1 ) / THE APPELLANT. 9 INTEROUTE COMMUNICATIONS LTD ITA N O. : 497 6 /MUM/201 4 2 ) / THE RESPONDENT. 3 ) THE CIT - (A) / 10 , MUMBAI. 4 ) THE D IRECTOR OF I NCOME T AX (INT. TXN.) - II , MUMBAI 5 ) , , / THE D.R. L BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS