By Geeta Jani | Dhishat B. Mehta | Bhaumik Goda
Chartered Accountants
6 Factiva vs. DCIT [TS-462-ITAT-2022(Mum)] ITA No: 6455/Mum/2018 A.Ys.: 2015-16; Date of order: 31st May, 2022
Article 13 of India-UK DTAA – Payments received from subscribers for access of news database was not royalty under India-UK DTAA
FACTSAssessee is in the business of providing global business news and information services to organizations worldwide by employing content delivery tools and services through a suite of products and services under the name Factiva. It granted the rights to distribute the Factiva product in the Indian market to D on principal-to-principal basis. Assessee claimed that the amount received by it was business income which was not taxable in India. However, AO treated the same as royalty under section 9(1)(vi), read with Article 13 of India-UK DTAA. On appeal, DRP upheld order of AO.
Being aggrieved, assessee appealed to ITAT.
HELD• Assessee collected the information available in the public domain, created a database of news, article/information and provided advanced search capabilities to its subscribers. Subscribers of Factiva product could access the database, raise query and related news articles/ other information were displayed on the screen.
• Subscribers did not make payment for any information qua industrial, scientific or commercial experience. They made the payment for accessing a searchable database based on information already available in the publi
