IT Project software services whether royalty as per Indo-Singapore DTAA

Facts :

Assessee a Singapore entity had rendered certain IT project related services which was alleged as royalty under Indo-Singapore DTAA. Separately there were group support services also provided which were also held as royalty and fee for technical services by the lower authorities. On further appeal -

Held in favour of the assessee that the IT project related services were not royalty as per Indo-Singapore DTAA. Since the topic of group support services was not properly examined by lower authorities that alone was remanded to AO/DRP for fresh adjudication.

Applied : Assessee's own case of earlier years.

Ed. Note : Recently we have been seeing a spate of additions made by revenue in international taxation no matter prior year decisions going in favour of the assessee despite no change in circumstances either. At the outset this seems a little odd, but in the personal views of the author this probably is a working capital augmentation plan by revenue and nothing more as anyways the assessee is due to get this refund - but let him/her get it delayed after 3/4 years of post appeal. Until then it will remain with the Government funding their tax working capital. With market interest rates remaining firm this funding comes relatively better without floatation costs either for the Government. Tax deferral itself is a strategy both by the assessee and by the revenue if done smartly/correctly.

Case: Atos Information Technology (Singapore) Pte Ltd. v. Dy. CIT 2023 TaxPub(DT) 2285 (Mum-Trib)