Dismissing the appeal of the revenue the Tribunal held that, Payment for ‘bandwidth services’ is not assessable as ‘royalty’. if the assessee only has access to services and not to any equipment. The assessee also did not have any access to any process which helped in providing of such bandwidth services. All infrastructure & process required for provision of bandwidth services was always used and under the control of the service provider and was never given either to the assessee or to any other person availing the said services. Amount received by RJIPL from assessee for providing standard bandwidth services was its ‘ business profits’ which in the absence of its business connection or PE in India could not be brought to tax in India. (ITA No.936/Mum/2017, dt. 10.05.2019)(AY. 2016-17)
DCIT v. Reliance Jio Infocomm Ltd ( 2019) 200 TTJ 213 / 73 ITR 194 / 179 DTR 105(Mum.)(Trib.), www.itatonline.org
S. 9(1)(vi) : Income deemed to accrue or arise in India–Royalty – Payment for ‘bandwidth services’ is not assessable as ‘royalty’– Amount received by RJIPL from assessee for providing standard bandwidth services was its ‘business profits’- In the absence of its business connection or PE in India could not be brought to tax in India- DTAA-India–Singapore . [S. 90 , 195, 195A, Art. 7,12]