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TMI Blog2014 (5) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... Nitesh Joshi ORDER PER I.P. BANSAL, J.M: This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-II, Mumbai dated 09/09/2010 for assessment year 2006-07. Grounds of appeal read as under: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 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. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that value of the software supplied by the assessee to M/s. Siemens Ltd. Cannot be treated as 'Roy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court rendered in respect of assessment year 1996-97, which is an order dated 22/10/2012 in I.T. Appeal No.124 of 2010, copy of order is placed at pages 3 to 4 of the paper 3 book. Following question was raised by the Revenue before Hon'ble Bombay High Court: "i) Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the Royalty and fees for technical services should be taxed on receipt basis without appreciating the fact that the Hon'ble Supreme Court has held in the case of Standard Drum Motors Private Limited V/s. CIT, 201 ITR 391 that the credit entry to the account of the assessee non-resident in the books of the Indian Company amounted to receipt by the non-resident?&q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pments sold by the assessee. The A.O segregated the sale amount into two categories; (a) sale of equipments; (b) sale of software and assessed a sum of ₹ 236.81 crores on account of supply of software by treating the same as Royalty in the hands of the assessee company. On the other hand, it is the stand of assessee that software is a part and parcel of equipment sold, therefore, no Royalty is payable. Before, Ld. CIT(A) reference was made to the earlier decision of ITAT on the same issue in which the issue was decided by ITAT in favour of the assessee. These are decisions in ITA No.1957/Mum/2007 & C.O No.187/Mum/2007 dated 8/12/2008 in respect of assessment year 2001-02 and ITA No.2099/Mum/2007 & CO No.188/Mum/2007 dated 10/12/2008 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B)] has considered this aspect and held that "the payment made to the Assessee for use of software in the equipment did not amount to royalty either under the Income-tax Act or the DTAA". The facts involved in the instant case are akin to those considered by the Special Bench in the afore-noted case. The learned Departmental Representative could not point out any distinguishing feature in the facts of the instant case vis- à-vis that decided by the Special Bench. Respectfully following the view taken by the Special Bench on this aspect of the matter, we are of the considered opinion that the amount received by the Assessee towards supply of software cannot be segregated from the supply of equipment and hence that portion ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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