Payment received by Non Resident assessee from Indian Company for IUC cannot be taxed as royalty in India u/s 9(1)(vi) of Act on absence of DTAA : ITAT

The Bangalore ITAT ruled that payments received by Globe Teleservices Ltd., a non-resident company from M/s. Vodafone South Ltd., couldn't be taxed as royalty in India under Section 9(1)(vii) of the Income Tax Act, due to the absence of a Double Taxation Avoidance Agreement (DTAA). \r

Despite the absence of a treaty between India and Hong Kong, where the assessee is based, the tribunal found the payments couldn't be taxed under the Income Tax Act alone. Citing the Karnataka High Court's decision in the Vodafone Idea Ltd. case, the ITAT, led by Beena Pillai and Laxmi Prasad Sahu, upheld the assessee's appeal.