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3. Briefly, the facts are, the assessee is a non-resident corporate entity incorporated in United States of America (USA) and tax resident of USA. As stated by the Assessing Officer, the assessee is a world leader in 3G/4G and next generation wireless technologies. The assessee holds a number of patents in the field of manufacture of subscriber units and network equipments capable of operating on Code Division Multiple Access (CDMA) technology. Basically, the assessee earns revenue from two divisions operated by it, viz., Qualcomm CDMA Technology (QCT) division, which develops and supplies CDMA based integrated circuits and systems software for wireless voice and data communication, multimedia functions and global positioning system products and Qualcomm Technologies Licensing (QTL) division, which grants license to manufactures of wireless products for the right to use qualcomm's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. In the assessment year under dispute, the assessee earned the following incomes :

Further it not a case of taxability of OEMs. The issue is related to that the OEMs were carried out their business activities in India through its PE.

Para- 11. TAXABILITY OF ROYALTY ARISING FROM LICENSING OF CDMA TECHNOLOGY TO OEM (ORIGINAL EQUIPMENT MANUFACTURERS) FOR CDMA INFRASTRUCTURE EQUIPMENT AND HANDSETS.

Para-11.1 Two important streams of the assessee's income are from Qualcomm CDMA Technologies (QCT) which develops and supplies CDMA- based integrated circuits and systems software for wireless voice and data communications, multimedia functions and global positioning system products and Qualcomm Technologies Licensing ('QTLj which grants licenses to manufacture of wireless products for the right to use Qualcomm's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. For the Indian income tax assessment of the assessee we are only concerned with the revenues of QTL that to the extent they are sourced in India.

Para-12.9 Here it may be mentioned that the four principal business units of Qualcomm are as follows:

Qualcomm CDMA Technologies ('QCT) -- QCT develops and supplies CDMA-based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning system products.

Qualcomm Technologies Licensing ('QTL') -- QTL grants licenses to manufacturers of wireless products for the right to use portions of Qualcomm's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and safe of certain wireless products.

(d) Qualcomm Strategic Initiatives (QSI) -- QSI manages the Company's strategic investment activities, and makes strategic investments to promote the worldwide adoptions of CDMA-based products and services.

Para-12.10. Perusal of earlier year assessment orders would show that the AO observed that two important streams of the assessee's income are from Qualcomm CDMA Technologies ('QCT) which develops and supplies CDMA based integrated circuits and systems software for wireless voice and data communications, multimedia functions and global positioning system products and Qualcomm Technologies Licensing ('QTL') which grants licenses to manufacture of wireless products for the right to use Qualcomm's intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. AO sought to tax revenues of these units and quantified it in form of income from CDMA handsets and CDMA infrastructure equipments. Attention is invited to the profile of QCT which develops and supplies CDMA-based integrated circuits and system software for wireless voice and data communications, multimedia functions and global positioning system products.