9911796707
TMI Blog2011 (10) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the provisions of Section 9(1)(vi) of the Act read with the Double Taxation Avoidance Agreement between. India and USA was applicable. Decided against assessee. - IT appeal nos. 168 & 170/2004 and 756 to 758/2006 - - - Dated:- 21-10-2011 - V.G. Sabhahit and Ravi Malimath, JJ. JUDGMENT ITA Nos. 756, 757 758/2006 are filed by the revenue being aggrieved by the common order dated 18-11-2005 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'B' (hereinafter referred to as the 'ITAT') for the assessment years 2000-01, 2001-02 2002-03 wherein the ITAT has set aside the order passed by the assessing officer which has been confirmed by the appellate authority, by following the judgment passed by the ITAT in Samsung Ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for failure to deduct tax at source in respect of payment made to Lucent Technologies, USA for the software imported. 6. The case of the assessee is that if had obtained orders from the Department of Telecommunications for the manufacture and supply of telecommunications/switching equipments. In order to execute its orders in India it had placed order's on Lucent Technologies, USA for the supply of software. It had placed orders with Lucent Technologies, Taiwan for the supply of hardware. The assessee had integrated the software and the hardware and had executed its commitment to the Telecommunication Department. 7. The Income-Tax Officer and as confirmed by the Commissioner of Appeals proceeded to hold that the software and the hardwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 201(1) and 201(1A) was set aside. However the assessee has been paying royalty for the use of software. Aggrieved by the same, the revenue has preferred these appeals. 8. The Tribunal proceeded to consider the contracts entered into between the assessee and Lucent Technologies, U.S.A and Taiwan. It failed to take note of the fact that the ITO as well as the Commissioner of Appeals have clearly held that the transaction which is liable to tax in India is the amounts received by Lucent Technologies, USA, for the supply of software to the assessee in India as per Section 9(1)(vi) of the Act read with the Double Taxation Avoidance Agreement between India and the USA. 10. This supply of software by Lucent Technologies, USA to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d did not give any importance to the contract entered into between the assessee and its contract with Lucent Technologies, USA and Lucent Technologies, Taiwan. In order to understand the transaction liable to tax it is imperative to consider the contract entered into by the assessee with Lucent Technologies, USA, and Lucent Technologies, Taiwan. The non-consideration of these two agreements is therefore erroneous. The examination of the contract only between the assessee and the telecom Department, is therefore erroneous. It is therefore clear that the Parliament was aware of the import of software both independently and under an integrated system. Therefore in view of the proviso, the finding recorded by the tribunal upholding the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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