Mudra Online Technologies Pvt. Ltd. v. Asst. CIT Circle-14(2)(2)

Parties Involved

Facts Summary

The assessee, Mudra Online Technologies Pvt. Ltd., engaged in advertising agency services and wind energy generation, filed an income return for the assessment year 2015-16 declaring total income of Rs. 11,21,15,120/-. The return was selected for scrutiny, and the Assessing Officer noticed payments made to Facebook Ireland Ltd. amounting to Rs. 15,60,955/- for digital advertising services. The Assessing Officer disallowed these payments as royalty under section 40(a)(i) of the Income Tax Act, 1961, as tax was not deducted at source. The Commissioner of Income-tax (Appeals) upheld the disallowance, leading to the present appeal by the assessee.…

Legal Issues

• 1. Disallowance of payment to Facebook Ireland Ltd. as royalty.
• 2. Whether the payment to Facebook Ireland Ltd. is in the nature of royalty.

Judgment Outcome

Decided in favour of Assessee.

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