The AO passed order u/s. 201(1) and held that remittance made by assessee to GTRC was nothing but royalty as per provisions of s.9 (1)(vi) as well as in terms of article 12 of DTAA between India and USA. Held that, when assessee had explained with support of agreement and copies of invoices that payment made was towards cost reimbursement of joint research project on which both parties had equal right to use and did not amount to royalty as per section 9(1)(vi) and not covered under clause 3 of article 12 as royalties and fees for included services of India USA DTAA. Therefore, levy of interest u/s. 201(1A) was not justified. (r.w.s. 195 and 201 and article 12 of DTAA between India and USA)(AY. 2012-13, 2013-14)
Pandit Deendayal Petroleum University-PDPU. v. ITO (2021) 189 ITD 110 (Ahd.)(Trib.)
S. 201 : Deduction at source-Failure to deduct or pay-Royalties/fees for technical services-Payment made to US based company towards cost reimbursement on which parties had equal right to use and not paid amount to royalty, levy of interest u/s. 201(1A) is unjustified-DTAA-India-USA. [S. 9(1)(vi), 195, 201 (IA), Art, 12]