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The Tax Publishers Dy. CIT v. Pugmarks Inter Web Ltd. [ITA No. 769 to 772/Chd/2013, dt. 27-4-2016] : 2016 TaxPub(DT) 2222 (Chd-Trib) Cross border payment for web hosting services whether subject to TDS Facts: Assessee had to pay web-hosting charges to its US subsidiary Pugmarks Inc and to two other people. This was read as royalty for use of equipment, services by the assessing officer and disallowance was done under section 40(a)(ia). On appeal Commissioner (Appeals) negated the assessing officers order. On further appeal by department: Held in favour of the assessee that the payment for web hosting services is not royalty thus outside the scope of TDS. ITO v. People Interactive (I) P. Ltd. 33 CCH 261 (Mum) Applied where held that web hosting is not royalty subject to TDS under section 9(1)((vi) or under Indo-US DTAA.
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