9911796707
TMI Blog2013 (11) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue and learned counsel, Mr. Nitesh Joshi, representing the assessee. Ground No. 1, reads as follows : "1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in holding that the income of the assessee arising on account of royalty and fees for technical services is taxable on receipt basis and not on accrual basis as held by the Assessing Officer in the assessment order." After hearing the rival contentions, we find that the issue is whether income from royalty and fee for technical services are to be taxed on receipt basis or accrual basis. Both parties agree before us that similar issue came up before the Tribunal in the assessee's own case in the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no transfer of a right to use the copyright in the software. Thus, it is argued that there is no payment for royalty either in the Income-tax Act, 1961, or under the DTAA (Double Taxation Avoidance Agreement) between India and Germany. Learned counsel for the assessee relied on the decision of a co-ordinate bench of this Tribunal in the assessee's own case for the assessment years 2001-02, 2002-03 and 2003-04 and submitted that the similar issue was decided in its favour by following the decision of the Special Bench in Motorola Inc. v. Deputy CIT [2005] 95 ITD 269 (Delhi) [SB]. He relied on the following case law : (i) Deputy Director of Income-tax v. Solid Works Corporation [2012] 17 ITR (Trib) 510 (Mumbai), I. T. A. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in I. T. A. No. 1957/Mum./2007, for the assessment year 2001-02, in the assessee's own case in I. T. A. No. 1957/ Mum./2007, order dated December 8, 2008, has held as follows: "6. We have heard the rival submissions and perused the relevant material on record. There is no dispute on the fact that the assessee had not separately sold software but it was part and parcel of the equipment supplied to M/s. Siemens Ltd. The case of the assessee is that it should be taken as 'business profit' as per article 7 of the DTAA between India and Germany. On the other hand the Department wants it to be considered as falling under article 13, being the royalty. We have to decide whether the sum of Rs. 5.29 crores is to be considered as &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court in Ericsson AB applies to the present case. The facts of the judgment in CIT v. Samsung Electronics Co. Ltd. [2012] 345 ITR 494 (Karn), I. T. A. No. 2808 of 2005, judgment dated October 15, 2011, passed by the hon'ble Karnataka High Court is not applicable, as the hon'ble High Court was not dealing in a case where the software was embedded in the equipment. Even otherwise, the Tribunal in Solid Works Corporation [2012] 17 ITR (Trib) 510 (Mumbai) considered a similar issue and vide paragraphs 12 to 15, held as follows (page 532) : 12. The above decision of the Authority for Advance Ruling in the case of Dassault Systems K. K., In re [2010] 322 ITR 125 (AAR) was a case of sale of shrink wrap software and the Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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