REUTERS TRANSACTION SERVICES LTD. Vs. DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)
INCOME TAX APPELLATE TRIBUNAL
Reuters Transaction Services Ltd.
Deputy Director Of Income Tax (International Taxation)
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Vijay Pal Rao, Member (J) -
(1.) THESE two appeals by the assessee are directed against the order dt. 28th Sept., 2012 of CIT(A) and assessment order passed under s. 143(3) r/w s. 144C(13) of the I.T. Act in pursuance to the directions of DRP under s. 144C(5) of the Act for asst. yrs. 2008 -09 and 2009 -10 respectively. For the asst. yr. 2008 -09 the assessee has raised following grounds:
"In the facts and in circumstances of the case, Reuters Transaction Services Ltd. (the 'appellant') respectfully submits that the learned CIT (A) has:
1. Failed to comprehend the facts of the case and erred in law and in facts in disregarding the contractual arrangement between the appellant, its customers and Reuters India (P) Ltd. ('RIPL') and holding that:
(a) the contractual arrangement lacks commercial substance and is illusionary and is a camouflage entered into to avoid payment of legitimate taxes;
(b) the corporate veil of RIPL, a separate legal entity, be lifted; and
(c) the equipment installed at the premises of the customer of appellant is provided by the appellant and not RIPL;
(2.) FAILED to comprehend the facts and has erred in law and in facts in presuming certain facts listed in Annex. 1; Erred in law and in facts in holding that the appellant has provided equipment and related services including connectivity, network access, maintenance, updates and training to the customers through RIPL and in holding that the revenue received by appellant is for use of equipment and is in the nature of royalty income under Art. 13(3)(b) of the Double Taxation Avoidance Agreement between India and the United Kingdom ('India -UK DTAA') and under cl. (iva) of Expln. 2 to s. 9(1)(vi) of the I.T. Act, 1961 ('the Act');
(3.) ERRED in law and in facts in holding that the dealing matching service provided by the appellant to its customers entails matching of bids in a 'secret environment' and in holding that the revenue received by the appellant is for use of secret process and is in the nature of royalty income under art. 13(3)(a) of the India -UK DTAA and under cl. (ii) of Expln. 2 to s. 9(1)(vi) of the Act;;
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