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3.1 Vide its reply dated 09.03.2022, the assessee submitted that it is based in the US and is engaged in the business of providing standard and automated cloud computing services to customers around the world. During the AY 2014-15 and AY 2016-17 the assessee received an amount of Rs. 2,47,68,23,222/- and Rs. 10,07,81,05,172/- respectively from its customers in India. These receipts relate to providing standard and automated cloud computing services to its customers.

3.2 Thereafter, a Show Cause Notice ("SCN") dated 17.03.2022 was issued and served upon the assessee which read as under:-

ITA Nos. 522,& 523/ Del/2023 The Ld. AR submitted that the cloud computing services provided by the assessee are merely standard and automated services. The facility of different category of cloud computing services provided by the assessee as well as pricing, are all publically available online to anyone. Customers choose from the suite of services available what they need, when they need them. Instead of buying, owning and maintaining own data centres and servers, organisations can access standard and automated facilities as compute power, storage, data basis and other services on an as-needed basis. In this context, he explained that cloud computing services offered to the customers by the assessee are all standardised and there is no customisation for any one particular customer. While providing the standard and automated services / facility, AWS group / affiliates maintains its technology infrastructure in a secure environment and businesses / customers access these standard / common facility via the internet to develop and run their own applications. Capacity can grow or shrink instantly on demand and organisations only pay for what they use as per the terms of standard subscription plans / services offered.

7.1 In order to avail cloud computing services, the customer enters into a standard AWS customer agreement which authorises the customer to access the cloud computing services they opt for. The customers themselves are responsible for the development, content, operation, maintenance and use of the customer's content while availing the standard and automated cloud computing services. At no point, the customers have any physical access to or control over the equipment used in delivering these services.

30. We are in agreement with the submission of the Ld. AR that the impugned issue also stands covered by the decision of the Pune Tribunal which was rendered in the context of similar cloud services in the case of M/s Sunguard Availability Services LLP (supra) and Rackspace, US Inc. (supra) wherein it has been held that rendering cloud computing service cannot be held to be liable to tax in India as FTS/FIS.

31. In view of the above factual matrix of the case and placing reliance on the various judicial precedents cited above, we are of the view that the impugned receipts of the assessee for AWS services/cloud computing services rendered to the customers in India do not fall within the purview of "FIS" under Article 12(4)(b) of the India-USA DTAA as the same do not satisfy the 'make available' clause envisaged therein. Accordingly, we allow the ground No. 2.1 and 2.2 r.w. ground No. 2 raised by the assessee in both the AYs.