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The Tax Publishers Interroute Communications Ltd. v. Dy. DIT [IT Appeal No. 2284 (Mum.) of 2014, dt. 31-3-2016] : 2016 TaxPub(DT) 1841 (Mum-Trib) Payment for cross border telecom use of Virtual voice network--An interconnect facility whether royalty under Indo-UK DTAA. *Facts:* Assessee non-resident was a telecom service provider who offered an interconnect facility called virtual voice network by which outgoing calls of Indian telecom players like Vodafone and Tata teleservices could be connected to offshore telecom players without use of any expensive infrastructure. The assessing officer and Commissioner (Appeals) read the same as royalties under the act and subjected it to tax. Assessees plea was it was a business income and in the absence of PE the same could not be taxed in India. On further appeal: Held in favour of the assessee that this was a standard facility, it fell outside the sccope of article 13 of Indo-UK DTAA as it did not make available any technology or process. There was no technical process in this to be called as a royalty. The same was not taxable in India. Note: Flash mailer 139 Bharti Airtel Limited v. ITO (TDS)/ITA Nos. 3593 TO 3596/Del/2012/Assessment Years : 2008-09 to 2011-12/ITAT Del/Dated 17-3-2016 is a similar decision.

The Tax Publishers

Interroute Communications Ltd. v. Dy. DIT [IT Appeal No. 2284 (Mum.) of 2014, dt. 31-3-2016] : 2016 TaxPub(DT) 1841 (Mum-Trib)

Payment for cross border telecom use of Virtual voice network--An interconnect facility whether royalty under Indo-UK DTAA.

Facts:

Assessee non-resident was a telecom service provider who offered an interconnect facility called virtual voice network by which outgoing calls of Indian telecom players like Vodafone and Tata teleservices could be connected to offshore telecom players without use of any expensive infrastructure. The assessing officer and Commissioner (Appeals) read the same as royalties under the act and subjected it to tax. Assessees plea was it was a business income and in the absence of PE the same could not be taxed in India. On further appeal:

Held in favour of the assessee that this was a standard facility, it fell outside the sccope of article 13 of Indo-UK DTAA as it did not make available any technology or process. There was no technical process in this to be called as a royalty. The same was not taxable in India.

Note: Flash mailer 139 Bharti Airtel Limited v. ITO (TDS)/ITA Nos. 3593 TO 3596/Del/2012/Assessment Years : 2008-09 to 2011-12/ITAT Del/Dated 17-3-2016 is a similar decision.