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TMI Blog2011 (10) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... y M/s. Gartner and the payment made by the respondent to M/s. Gartner in that behalf is for the licence to use the said database maintained by M/s. Gartner and such payment is to be treated as royalty' - Decided against the assessee - IT APPEAL NOS. 2804, 2805 & 2807 OF 2005 - - - Dated:- 15-10-2011 - V.G. SABHAHIT AND RAVI MALIMATH, JJ. E. Sanmathi Indrakumar for the Appellant. R.B. Krishna for the Respondent. JUDGMENT V.G. Sabhahit, J. These three appeals arise out of the common order passed by the Income Tax Appellate Tribunal (for short, 'the Tribunal') Bangalore Bench 'B' in I.T.A, Nos.153/Bang/2004, 154/Bang/2004 and 152/Bang/2004 respectively dated 30.12.2004. 2. The material facts leading up to these thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice under Section 201 of the Act was issued to the assessee to explain the reasons for non-deduction of tax. In response to the show cause notice, the assessee filed a reply dated 10.01.2003. wherein it was submitted that payment is akin to making a subscription for a journal or magazine of a foreign publisher and though the journal contained information concerning commercial, industrial or technical knowledge, the payee makes no attempt to impart the same to the payer. Thus, the payment falls outside the scope of Clause (ii) of Explanation 2 to Section 9(1)(vi) of the Act and the payment was not contingent on productivity, use or disposition of the information concerning industrial, commercial or scientific experience in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... galore. 2.3 The appellate authority, by order dated 28.11.2003, upheld the finding of the Assessing Officer that the payment made by the respondent to M/s. Gartner would amount to royalty and confirmed the order of assessment passed by the Assessing Officer in respect of the assessment years 2001-2002 and 2003-2004. However, in respect of the assessment year 2002-2003, the appeal was allowed in part holding that the provisions of Section 195 of the Act are not applicable to payment of Rs. 31,20,566/- made by the respondent to M/s. Gartner in respect of professional fees on 17.08.2001 since the consideration involved was not 'royalty' or "fees for included services' under Article 12 of DTAA with USA. Being aggrieved by the said order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved by the said common order, the respondent in those cases, filed Civil Appeal Nos. 7541-7542/2010 and connected matters before the Hon'ble Supreme Court and the Hon'ble Supreme Court by order dated 9-9-2010 set aside the order passed by the Division Bench of this Court by analyzing the provisions of Section 195 of the Act and remitted the matter to this Court for answering the substantial question of law framed by it, which reads as under: "The question which the High Court will answer is --- 'whether on facts and circumstances of the case, the ITAT was justified in holding that the amount(s) paid by the appellant(s) to the foreign software Suppliers was not 'royalty' and that the same did not give rise to any 'income' taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to a journal or magazine and nothing more than that. Therefore, the Tribunal has rightly allowed the appeals filed by the respondent herein by setting aside the order passed by the Appellate Authority and the Assessing Officer and the said order of the Tribunal is justified. 6. It is clear from the material on record that in identical cases i.e., I.T.A. No. 2988/2005 and connected cases, this Court after considering the contentions, which are identical to the contentions raised in these appeals, in the light of the decisions relied upon by the learned counsel appearing for the parties in the said cases, by a separate order, held that the payment made by the respondent to M/s. Gartner, which is a non-resident Company would amount to 'ro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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