The Deputy Commissioner of Income Tax, International Taxation, Circle -1(2), Bengaluru. Vs. M/s. Blue Yonder Inc.

Parties Involved

Facts Summary

The assessee, M/s. Blue Yonder Inc., received certain amounts from its Indian subsidiary M/s. JDA Software Inc., (now Blue Yonder Inc.,) towards subscription charges for use of database, telephone and broadband charges, computer maintenance expenses, and other reimbursements. The Assessing Officer held these payments to be Fees for Included Services (FIS) and brought them to tax. The assessee appealed to the Commissioner of Income Tax (Appeals) who decided in favor of the assessee by following previous judgments. The Revenue appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the CIT(A) erred in holding that reimbursements under the head software maintenance are not Royalty receipts or FIS by relying on SC decision in the case Of Engineering Analysis without examining the specific agreements of this assessee?
• 2. Whether the CIT(A) erred in not recognising the fact that the reimbursement for hardware maintenance are technical services which has been made available to the Indian entity, and are hence liable to be taxed as FTS?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

Similar Judgements

• The Deputy Commissioner of Income Tax, Circle – 1(2), Bengaluru Vs. M/s. Blue Yonder Inc

  Bangalore bench

• FCS Computer Systems S PTE Ltd Vs. ACIT, International Taxation- 1(3)(1), Delhi

• Toshiba Corporation vs. The Deputy Commissioner of Income Tax

  Delhi Bench benchAY 2020-21Partly Allowed

• Red Hat India Private Limited Vs. Assistant Commissioner of Income Tax, Circle 15(3)(1), Mumbai

  Mumbai Bench benchAY 2016-17Allowed

• John Wiley and Sons, Inc. Vs The Assistant Commissioner of Income Tax, International Taxation, Circle-2(1)(2), New Delhi

  Delhi Bench benchAY 2021-22Partly Allowed

• Quotient Technology India Private Limited vs. Income Tax Officer

  Bangalore bench