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8. The bench can also place reliance on the order dated of a co-ordinate Bench, in ITA no 1553/Del/2016; Microsoft Regional Sales Pte. Ltd. V. Assistant Commissioner of Income-tax, Circle-2(2)(1), Intl. Taxation, Delhi, in which also one of us 'the Judicial Member', was in quorum had considered the issue of payments made to cloud services as subscription and held ;

"7.1 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 front end 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 (para 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."