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20. It is noted that the equipments and machines relating to the services provided by the assessee are under its own control and are outside India and its customers do not have any physical access to such equipments providing system services.

21. The Coordinate Bench of Hon'ble Delhi Tribunal in case of MOL Corporation vs. DCIT (supra), under similar circumstances, has held that the assessee therein who was a resident of USA was engaged in providing cloud computing infrastructure and licensing of software to its Indian clients through subscription agreement. Hon'ble Delhi Tribunal on the facts therein observed and held as under:

IT(IT)A Nos. 772/Bang/2022 & 660/Bang/2023 "Giving thoughtful consideration to the matter on record, the bench is of considered view that the cloud base services do not involve any transfer of rights to the customers in any process. The grant of right to install and use the software included with the subscription does not include providing any copy of the said software to the customer the assessee's cloud base services are though based on patents/ copyright, but the subscriber does not get any right of reproduction, The services are provided online via data centre located outside India. The Cloud services merely facilitate the flow of user data from the frontend users through internet to the provider's system and back. The Ld. AO has fallen in error in interpreting it as licensing of the right to use the above Cloud Computing Infrastructure and Software (pare 10.5 of the Ld. AO order) Thus. The Subscription fee is not royalty but merely a consideration for online access of the cloud computing services for process and storage of data or run the applications."