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Showing contexts for: technical fee in Verizon Communications Singapore Pte. ... vs Assessee on 4 August, 2010Matching Fragments
2. That on the facts and circumstances of the case and in law, the Ld. AO has erred in holding that the amounts received by the appellant can also be held to be in the nature of 'Fee for Technical Services' under Article 12(4) of the India Singapore Tax Treaty and under section 9(1)(vii) of the Act and therefore are chargeable to tax in India.
3.1 That on the facts and circumstances of the case and in law, the Hon'ble Dispute Resolution Panel, Chennai ('Hon'ble DRP') has erred in holding that the appellant company is providing transponder capacity to its customers.
3.1 As regards taxability as fees for technical services, it was submitted that the payments received by Verizon Singapore in respect of the services rendered to Indian customers outside India are not taxable as 'fee for technical services' under the Act or the India Singapore Tax Treaty.
3.2 As regards taxability of 'royalty', it was submitted that the income earned by Verizon Singapore from provision of international telecom services cannot be characterized as royalty for use of process and taxed as such in the hands of Verizon Singalore.
• The payments received by the assessee on account of providing various equipments either directly or through its affiliates would amount to royalty. This is discussed in the succeeding paragraphs.
• The ITAT in the case of Wipro Ltd. vs Income Tax Officer (80 TTJ 191) has not considered the applicability of royalty for use of equipment under sub-section 4(a) to Explanation2 of section 9(l)(vi) of the Income Tax Act.
• In the case of Skycell Communications Ltd. and Another Vs. DCIT and Others (2511TR 53), the Madras High Court has held that payment made to cellular mobile operators by the subscribers would not constitute fees for technical service. This is distinguishable from the issue under discussion for the reason that the Skycell case relates to collection of a fee for the use of a standard facility provided to an average house-holder or consumer, whereas in the present case the issue is Royalties for the use of equipment, wherein there is a one to one agreement between the companies.