9911796707
TMI Blog2015 (11) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... of America ("USA") and a tax resident of USA. The asseessee is a leading global supplier of innovative decision support software products such as Pipe Line Studio ("PLS"), Pipe Line Manager ("PLM") and Pipe Line Transporter ("PL T") that enhance and integrate operational efficiency, commercial profitability and safety across pipelines as well as the energy transportation, storage, marketing and delivery functions. 2.1 The assessee has, during the year under consideration, sold the above mentioned software products to Energy Solutions International (India) Private Limited ["ESI India"], a group entity incorporated in India, who in turn sells the same to its customers in India. * The customers, based in India, place a purchase order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "NIL" taxable income under the Act. The case was selected for scrutiny under CASS. The draft assessment order was passed by the learned Assessing Officer ("AO") under section 144C of the Act on March 7, 2014, treating the payment towards the sale of software in the nature of Royalty taxable at the rate of 10 percent as applicable under the ambit of the provisions of DTM and applied surcharge at the rate of 7.5 percent on the income so computed. Based on the same an upward adjustment to the tune of Rs. 1,46,05,511 was made to the income of the assessee. 3. Aggrieved by the draft assessment order, the assessee approached the Hon'ble Dispute Resolution Panel ("DRP"). The Hon'ble DRP had, in its directions dated December 8, 2014, obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Before us, the ld. AR submitted that in the case of ESl lndia for AY 2007-08 and AY 2008-09, the learned AO has vide order dated February 23, 2015, after considering the facts involved with respect to the payments to the assessee towards purchase of software products, accepted the contentions of ESI India that such payments cannot be treated as royalty and deleted the disallowance for non-deduction of tax at source under section 40(a)(i) of the Act. The learned AO had, while holding so, took into account the ratio laid down by the Hon'ble Delhi High Court in the case of Dynamic Vertical Software India Private Limited (332 ITR 222) as per the directions of the Hon'ble Tribunal. Ld. AR, therefore, contended that since the facts in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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