DIRECTOR OF INCOME TAX Vs. HINDALCO INDUSTRIES LTD

JUDGEMENT

(1.) THIS is an appeal preferred by the Revenue against the Judgment of ITAT holding that the payments received by the assessee are not royalty under article 12 of the agreement between the Government of Republic of India and the Government of Australia for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income. The Assessee had made payment of US # 72,000/- to M/s. Standard and Poor's (Australia) Pvt. Ltd. (hereinafter referred to as "S&P") for corporate credit rating of the appellant company. It was the contention of the appellant that what was paid was towards royalty. The learned Tribunal on hearing the parties was pleased to record a finding as under :

(2.) IT is against this order that the Revenue has preferred this appeal. The questions of law as formulated read as under :

(3.) WE may mention that while considering the Indo-Singapore DTAA, a question had arisen before us, of the grading report prepared by the Gemmological Institute of America (GIA) and whether such report can be said to be parting of knowledge or information in favour of a person who seeks the specialised knowledge of GIA in Diamond rating, in W.P. No.2062 of 2007 decided on 12.12.2007. Considering the definition of "Royalty" in Article 12(3) of that DTAA, we have held that the person who seeks information of a specialized agency in the form of grading certificate would not be receiving any information or knowledge and consequently income received thereof would not be royalty. The same principle would have to be applied to the facts also of this case.