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TMI Blog2020 (3) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... . The answer to this question is contingent on factual determination, as the legal position has changed from April 01, 2011. It is now required to be considered whether the receipts in the hands of the assessee qualify to be royalty or not? If the answer to this question is in the affirmative, then in that event, the relevant provision would now be 44DA(1). CIT has also made certain observations that the assessee is not transferring the ownership in the software to the purchaser and is only granting a license to use the same. It has been further held that under Clause (v) of Explanation 2 to Section 9 (1) (vi) of the Act, transfer of all or any rights in respect of any copyright is Royalty . It has been held that if the software continues to be owned by the licensor, the use thereof would amount to Royalty . From the above it manifests that the contracts executed by the assessee are composite contracts and there is no bifurcation with respect to the nature of consideration relating to the services rendered. The assessee has not segregated its activities into supply of software and maintenance/support services. The entire income derived under the contracts was offered for taxation u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Petitioner is granted liberty to claim benefit under the said DTAA before the Ld. CIT if it wishes to do so. Besides, in the event the answer to the question is in the affirmative, the assessee shall also be at liberty to assail such findings on merit, as we have refrained ourselves from determining whether the income of royalty is excluded from the definition under the Act. The writ petition is allowed in the above terms. X X X X Extracts X X X X X X X X Extracts X X X X ..... r alia on account of providing services or facilities in connection with oil and gas operations. 5. The CIT declined to interfere with the final assessment order and rejected Petitioner's revision petition, primarily on the ground of maintainability, without dealing with the merits of the case. The writ petition [ W.P.(C) No. 6052/2017] impugning the said order was allowed, order of the CIT was quashed and the matter was remanded to the Respondent with a direction to examine the case on merits, with liberty to the Petitioner to challenge the same in case of an adverse outcome. Subsequently, vide order dated 01.11.2018, the case was decided on merits and Petitioner's claim of taxation on presumptive basis under Section 44BB was rejected, and the view of the AO that Petitioner's case would fall within the ambit of section 44DA of the Act was upheld. Aggrieved with the aforesaid order, the Petitioner has filed the present writ petition. SUBMISSIONS OF THE PARTIES 6. Mr Piyush Kaushik, learned counsel for the assessee, contended that the impugned order dated 01.11.2018 is fundamentally flawed, as the respondent has failed to appreciate the applicability of the decision of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isturbed. In this regard, he places reliance on the decision of Director of Income Tax-II v. OHM Ltd [2012] 28 Taxmann 120 (Del) which approved the decision of the Authority for Advanced Ruling in Geofizyka Torun sp Z.O.O, In re : [2010] 320 ITR 268. He submits that in light of the aforesaid decision, there can be no ambiguity that the insertion of the Second Proviso to Section 44DA, as well as the amendment in the First Proviso to Section 44BB, introduced by the Finance Act, 2010 could only be interpreted to mean that services that are general in nature would fall within the purview of Section 44DA. The said amendments do not, in any manner, have the effect of altering or effacing the separate identity of Section 44BB. The general provisions should yield to the specific provision as has been held in the case of J.K. Cotton Spinning & Weaving v. State of Uttar Pradesh & Ors. [1961 AIR 1170 SC]. A 'proviso' must be read harmoniously and cannot be divorced from the main section as laid down in the case of CIT v. Ajax Products Ltd. [55 ITR 741 SC] and therefore, an interpretation which advances the scheme of the Act should be adopted. 9. Per contra, Mr Ruchir Bhatia, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the relevant excerpts of the Finance Bill, 2010, to highlight the legislative intent behind insertion of the Second Proviso to Section 44DA. 10. Insofar as the decision of this Court in OHM Ltd. (supra) is concerned, he submitted that a Special Leave Petition under Article 136 of the Constitution of India had been preferred by the Revenue against the said judgment. Mr Bhatia further contended that the decision of the Supreme Court in ONGC v CIT (supra) must be read in the context of the facts of that case. In the said case, the Supreme Court arrived at a finding that the services provided to the ONGC by contractors did not qualify as "Fees for Technical Services" in view of exclusionary part of Explanation 2 to Section 9(1)(vii). That being the case, the Court held that the services are to be taxed under Section 44BB. The question whether the services provided are 'royalty', or not, was not an issue before the Hon'ble Court and hence, the said judgment is not applicable in the facts of the present case. Additionally, he submitted that ONGC (supra) applies to Assessment Years prior to the amendment of 2010 whereby the second proviso to Section 44DA was inserted w.e.f. 01.04.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s behalf on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India; and (b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils outside India. (3) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee. Explanation.--For the purposes of this section,-- (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 9(1)(vii) read as follows: "9(1) The following incomes shall be deemed to accrue or arise in India:- ................................ (vi) income by way of royalty payable by- (a) the Government ; or (b) a person who is a resident, except where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India : Provided that nothing contained in this clause shall apply in relation to so much of the income by way of royalty as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this clause, "computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customized electronic data. Explanation 4.-For the removal of doubts, it is hereby clarified that the transfer of all or any rights in respect of any right, property or information includes and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which such right is transferred. Explanation 5.-For the removal of doubts, it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not- (a) the possession or control of such right, property or information is with the payer; (b) such right, property or information is used directly by the payer; (c) the location of such right, property or information is in India. Explanation 6.-For the removal of doubts, it is hereby clarified that the expression "process" includes and shall be deemed to have always included transmission by satelli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r own clearly defined spheres; once a particular receipt of income takes on the character of Royalty/FTS as defined in section 9(1) (vi)/ 9(1) (vii), it cannot be considered for treatment under Section 44BB and has to be taxed under Section 115A/44DA of the Act. That being said, there are several judgments of this court, wherein it has been held that Section 44BB is a specific provision and incase the income falls within the ambit of Section 44DA(1) of the Act, it would be liable to be taxed under Section 44BB(1) of the Act, provided it was in connection with extraction or production of mineral oils. This conflict or inconsistency now stands resolved by virtue of the amendments introduced under the Finance Act, 2010. Though the insertions are stated to be clarificatory, however the rationale behind the introduction of the amendments has to be examined to appreciate the legislative intent envisioned under the Finance Act, 2010. 13. Section 44 BB is a special provision for computing profits and gains of a non-resident from business of providing services or facilities in connection with, or supplying plant and machinery on hire, used or to be used in the prospecting for or extraction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even when 44D was appearing in the statute book, Section 44BB contained a proviso which excluded applicability of Section 44BB to cases that were covered by Section 44D. However, it is pertinent to note that there was no similar proviso appearing under Section 44D. Finance Act, 2003 provided a sunset clause to the operation of Section 44D with effect from 1st April 2003. Simultaneously, from the said date, a similar provision by way of Section 44DA was introduced. It is significant to note that both the provisions i.e. Section 44D as well as Section 44DA pertain to the same subject matter i.e. taxation of income by way of "royalties and fees for technical services". 15. The aforesaid provisions further underwent change by way of amendments introduced by the Finance Act, 2010 w.e.f. 01.04.2011. By way of the said Act, a reference to Section 44DA was inserted in the proviso to sub Section (1) of Section 44BB. Simultaneously, a second proviso to sub Section (1) of Section 44DA was inserted to the following effect: "Provided further that provisions of Section 44BB shall not apply in respect of the income referred to in this Section". 16. Keeping in mind the legislative history of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal services, other than the income referred to in section 44DA i.e., income in the nature of royalty and fee for technical services which is not connected with the permanent establishment of the non-resident. Combined effect of the provisions of sections 44BB, 44DA and 115A is that if the income of a non-resident is in the nature of fee for technical services, it shall be taxable under the provisions of either section 44DA or section 115A irrespective 'of the business to which it relates. Section 44BB applies only in a case where consideration is for services and other facilities relating to exploration activity which are not in the nature of technical services. However, owing to judicial pronouncements, doubts have been raised regarding the scope of section 44BB vis-a-vis section 44DA as to whether fee for technical services. relating to the exploration sector would also be covered under the presumptive taxation provisions of section 44BB. In order to remove doubts and clarify the distinct scheme of taxation of income by way of fee for technical services, it is proposed to amend the proviso to section 44BB so as to exclude the applicability of section 44BB to the income w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment:- "8. A careful reading of the aforesaid provisions of the Act goes to show that under Section 44BB(1) in case of a non-resident providing services or facilities in connection with or supplying plant and machinery used or to be used in prospecting, extraction or production of mineral oils the profit and gains from such business chargeable to tax is to be calculated at a sum equal to 10% of the aggregate of the amounts paid or payable to such non-resident assessee as mentioned in Sub- section (2). On the other hand, Section 44D contemplates that if the income of a foreign company with which the government or an Indian concern had an agreement executed before 1.4.1976 or on any date thereafter the computation of income would be made as contemplated under the aforesaid Section 44D. Explanation (a) to Section 44D however specifies that "fees for technical services" as mentioned in Section 44D would have the same meaning as in Explanation 2 to Clause (vii) of Section 9(1). The said explanation as quoted above defines "fees for technical services" to mean consideration for rendering of any managerial, technical or consultancy services. However, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the said test and had in fact issued a circular as far back as 22.10.1990 to the effect that mining operations and the expressions "mining projects" or "like projects" occurring in Explanation 2 to Section 9(1) of the Act would cover rendering of service like imparting of training and carrying out drilling operations for exploration of and extraction of oil and natural gas and hence payments made under such agreement to a non-resident/foreign company would be chargeable to tax under the provisions of Section 44BB and not Section 44D of the Act. We do not see how any other view can be taken if the works or services mentioned under a particular agreement is directly associated or inextricably connected with prospecting, extraction or production of mineral oil. Keeping in mind the above provision, we have looked into each of the contracts involved in the present group of cases and find that the brief description of the works covered under each of the said contracts as culled out by the appellants and placed before the Court is correct. The said details are set out below. S.No. Civil Appeal No. Work covered under the contract 1. 4321 Drilling of expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calibration and inspection of far turbines. 27 1522 Replacement of choke and kill consoles on drilling rigs. 28. 1521 Inspection of gas generators. 29. 1515 Inspection of rigs. 30. 2012 Inspection of generator. 31. 1240 Inspection of existing control system and deputing engineer to attend to any problem arising in the machines. 32. 1529 Inspection of drilling rig and verification of reliability of control systems in the drilling rig. 33. 2008 Expert advice on the device to clean insides of a pipeline. 34. 2795 Feasibility study of rig to assess its remaining useful life and to carry out structural alterations. 35. 925 Engineering analysis of rig. 36. 1519 Imparting training on cased hold production log evaluation and analysis. 37. 1533 Training on well control. 38. 1518 Training on implementation of Six Sigma concepts. 39. 1516 Training on implementation of Six Sigma concepts. 40. 6023 Training on Drilling project management. 41. 2796 Training in Safety Rating System and assistance in development and audit of Safety Management System. 42. 1239 To develop technical specification for 3D Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rulings and referred to its earlier decisions of Director of Income Tax. v. Jindal Drilling & Industries Ltd. [2010] 320 ITR 104 (Delhi) and also to another order of Authority for Advance Ruling in the case of Geofizyka Torun Sp.zo.o In Re (2010) 320 ITR 268 (AAR), and concluded that the view taken by the Authority was correct and held that Section 44DA is broader in scope as compared to Section 44BB. In that context, the Court considered the effect of second proviso to Sub Section (1) of Section 44DA inserted by Finance Act, 2010 and held as under: "11. We do not think that there is any error in the view taken by AAR. Basically the rule that the specific provision excludes the general provision has been applied. Section 44BB is a special provision for computing the profits and gains of a non-resident in connection with the business of providing services or facilities in connection with, or supplying plant and machinery on hire, used or to be used, in the prospecting for, or extraction or production of mineral oils including petroleum and natural gas. Section 44DA is also a provision which applies to non-residents only. It is, however, broader and more general in nature and provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. Secretary, Board of Revenue Trivandrum, AIR 1964 SC 207 it was held that a familiar approach in such cases is to find out which of the two apparently conflicting provisions is more general and which is more specific and to construe the more general one as to exclude the more specific. 12. The second proviso to sub-section (1) of Section 44DA inserted by the Finance Act, 2010 w. e. f. 01.04.2011 makes the position clear. Simultaneously a reference to Section 44DA was inserted in the proviso to sub-section (1) of section 44BB. It should be remembered that section 44DA also requires that the non- resident or the foreign company should carry on business in India through a permanent establishment situated therein and the right, property or contract in respect of which the royalty or fees for technical services is paid should be effectively connected with the permanent establishment. Such a requirement has not been spelt out in Section 44BB; moreover, a flat rate of 10% of the revenues received by the non-resident for the specific services rendered by it are deemed to be profits from the business chargeable to tax in India under Section 44BB, whereas under Section 44DA, deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the present case the profits shall be computed in accordance with the provisions of section 44BB of the Act and not section 44DA. 13. In the result the writ petition fails and is dismissed with no order as to costs." [Emphasis Supplied] 19. Petitioner has strongly relied upon the aforesaid observations to argue that this Court had explicated that the second proviso does not efface the applicability of Section 44BB, and notwithstanding the second proviso to section 44DA, the legal position remains unaffected. Before commenting on this contention, it is also necessary to take note of a later decision of this court in PGS Exploration (Norway) AS v. Additional Director of Income Tax [2016] 383 ITR 178 (Delhi), where the court also had the occasion to consider the aforesaid case of Director of Income Tax v. OHM Ltd (Supra). In the said case, the Court upheld the contention advanced on behalf of the assessee that since it is engaged in business of providing services in connection with prospecting for mineral oils, its income, even if it falls within the ambit of Section 44DA (1) of the Act, would be taxable under Section 44BB (1). However, at the same time, the court consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify that the income falling within Section 115A(1)(b) of the Act which does not fall within the four corners of Section 44DA(1) of the Act would also not be taxable under Section 44BB(1) of the Act, for the reason that by virtue of proviso to Section 44BB(1) of the Act, it is expressly excluded. Accordingly, if the consideration received by the Assessee for services rendered is found to be "fees for technical services", the AO would specifically have to determine (a) whether the assessee had a PE in India during the relevant period; and (b) if so, whether the contracts entered into by the appellant with BG and RIL were effectively connected with the Assessee's PE in India. It is only, if the AO finds that the said two conditions are satisfied, that the income of the assessee would be computed under Section 44BB(1) of the Act. However, if such conditions are not satisfied then the income tax payable by the appellant would have to be computed in accordance with Section 115A(1)(b) of the Act." 20. The aforesaid observations, in our view, rightly interpret the position in law. For that matter, the Petitioner is misinterpreting the earlier judgment of this Court in Director of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendments as having been inserted only to clarify the position. So understood, the proviso to sub-section (1) of Section 44BB can only mean that the flat rate of 10% of the revenues cannot be deemed to be the profits of the non-resident where the services are of the type which do not fall under that section, but are more general in nature so as to fall under Section 44DA. Similarly, the second proviso to sub-section (1) of Section 44DA can only be interpreted to mean that where the services are general in nature and fall under the sub-section read with Explanation 2 to Section 9(1)(vii) of the Act, then an assessee rendering such services as provided in Section 44BB cannot claim the benefit of being assessed on the basis that 10% of the revenues will be deemed to be the profits as provided in Section 44BB. In other words, the amendment made by the Finance Act, 2010 w.e.f. 01.04.2011 in both the sections, cannot have the effect of altering or effacing the fundamental nature of both the provisions or their respective spheres of operation or to take away the separate identity of Section 44BB. We do not, therefore, see how these amendments can assist the Revenue's contention in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonnel) but does not include consideration for any construction, assembly, mining, or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head 'Salaries.' " 2. The question whether prospecting for, or extraction or production of, mineral oil can be termed as 'mining' operations, was referred to the Attorney General of India for his opinion. The Attorney General has opined that such operations are mining operations and the expressions 'mining project' or 'like project' occurring in Explanation 2 to section 9(1)(vii) of the Income-tax Act would cover rendering of services like imparting of training and carrying out drilling operations for exploration or exploitation of oil and natural gas. 3. In view of the above opinion, the consideration for such services will not be treated as fees for technical services for the purpose of Explanation 2 to section 9(1)(vii) of the Income-tax Act, 1961. Payments for such services to a foreign company, therefore, will be income chargeable to tax under the provisions of section 44BB of the Income-tax Act, 1961 and not under the special provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch part of the Petitioner's income, falls under Royalty and FTS and that has constricted us to conclusively decide the issue for the reasons explained hereinafter. We are disappointed to note that the CIT has not taken any definite stand. The draft assessment order proposed under Section 143 (3) read with Section 143 (1) of the Act, held that the income of the assessee has been considered in the nature of Royalty/FTS. The assessment was also finalized in the above terms. Petitioner challenged the assessment order by way of a revision under Section 264 of the Act where the following ground was urged: "Ground No. 1- Claim of section 44BB incorrectly denied. On the facts and circumstances of the case, the Ld. AO erred in law and on the facts of the case in holding that the income on account of receipts from provision of software enabled solutions to the oil and gas industry along with providing annual maintenance services of the software is in the nature of fees for technical services/ royalty payments under section 9(1)(vii)/9(1)(vi) of the Income Tax Act, 1961 (the 'Act')." 25. The CIT considered the contentions raised by the Petitioner and rejected the aforesaid ground int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in holding that the "mining or like project" are out of the purview of FTS, and consequently the same would not fall within the ambit of Section 44DA (1), however the scope of technical services cannot be broadened by giving a restrictive interpretation to the expression "mining or like project", appearing in Explanation 2 to clause (vii) of sub Section (1) of Section 9. The CIT, perhaps in an attempt to give meaning to the combined effect of the provisions of Section 44BB, Section 44DA and Section 115A has endeavoured to give such an interpretation. However, such a view is flawed, in as much as, the scope of expression "mining or like project" has been confined only to situations where services are performed onsite i.e. at the site of mining/drilling. We are unable to find any rationale in this reasoning. In the impugned order, it has been noted that the software supplied by Petitioner helps to ascertain the drilling spot where there is a maximum probability for finding oil. The impugned order also records that the assessee is regularly hired by Oil and Gas exploration companies such as ONGC; Reliance Industries Ltd. Gujarat State Petroleum Corporations; Oil India Ltd etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the reason for inserting the second proviso to sub-section (1) of Section 44DA and a reference to section 44DA in the proviso below sub-section (1) of Section 44BB. A careful perusal of both the provisos shows that they refer only to computation of the profits under the sections. If both the sections have to be read harmoniously and in such a manner that neither of them becomes a useless lumber then the only way in which the provisos can be given effect to is to understand them as referring only to the computation of profits, and to understand the amendments as having been inserted only to clarify the position. So understood, the proviso to sub-section (1) of Section 44BB can only mean that the flat rate of 10% of the revenues cannot be deemed to be the profits of the non-resident where the services are of the type which do not fall under that section, but are more general in nature so as to fall under Section 44DA. Similarly, the second proviso to sub-section (1) of Section 44DA can only be interpreted to mean that where the services are general in nature and fall under the sub-section read with Explanation 2 to Section 9(1)(vii) of the Act, then an assessee rendering such servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation-2 to Section 9(1)(vi) of the Act, transfer of all or any rights in respect of any copyright is royalty. The term "in respect of' has been interpreted by SC/HC and given very wide meaning in the following cases: (i) SC in Shahdara (Delhi) Saharanpur Light Railway Company Limited Ltd v. Upper Doab Sugar Mills Limited and another reported in AIR 1960, page 695; (ii) Bombay HC in Anusua Vithal and Others v J.H Mehata Additional Authroity under Payment of wages Act, Bombay and another reported in AIR 1960 (Bombay) page 201; (iii) Patna High Court in CIT Bihar and Orissa Patna vs Chunilal Rameshwar Lal reported in AIR 1968 (Patna) page 64. Relying on these judgments, Karnataka HC in the case of Synopsis International Old Limited (212 Taxman 454) held that the expression 'in respect of used in Explanation 2 denotes the intention of the Parliament to give a broader meaning and wider connotation that covered all the income from transfer of all or any of the rights in respect of a copyright. The HC also observed that when the meaning of the words used are clear, unambiguous, merely because it is a fiscal legislation, the meaning cannot be narrowed down and it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea pertaining to the concept of income from royalty. The Petitioner has impugned the decision of the CIT, contending that the income from facilities/services of specialized software will not fall within the purview of royalty under Section 9 (1)(vi) of the Act. CIT has essentially relied upon the judgment of Karnataka High Court in the case of Commissioner of Income Tax and Anr. v. Synopsis International Old Ltd. (2012) 208 Taxmann.com 162 (Kar) to hold that the expression "in respect of" used in Explanation 2 denotes the intention of the parliament to give a broader meaning and wider connotation that covers all the income from transfer of all or any of the rights in respect of copyright. The Petitioner on the other hand has contended that this Court has specifically dissented from the views expressed by the Karnataka High Court. In this regard, reliance has been placed on the decision of this Court in CIT v. Alcatel Lucent Canada (2015 372 ITR 476 (Del); CIT v. ZTE Corporation (2017) 392 ITR 80 (Del); Income Tax v. Ericsson A.B. 343 ITR 470 (Del) and Director of Income Tax v. Intrasoft Ltd. (2014) 220 Taxman 273 (Del). We need not go into this vexed question at this stage becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of software to be installed at Reliance facilities alongwith AMC for maintenance and support services of software in India alongwith supply of all enhancement and additions to the Software. h. Service Order number 8300000785 with Gujarat State petroleum Corporation Ltd for provision of AMC of paradigm software. The assessee is also providing installation and training with respect to the software provided. i. Quotation no. US1O-D14Q1; Quotation no. US-10-014R2-JS- Q2; Quotation no. us..1()"014R2-JS-Q3 and Quotation no. US- 10-014R2-JS-Q4 & with Fugro Geoscience India Pvt Ltd for provision of software license access and support· service agreement. j. Contract number OIUCCO/GPHY/GLOBAU275110-11 With Oil India Limited for provision of AMC and support services of paradigm software. The assessee is also providing services of its engineers who are deputed to site of OIL in India for the contract and maintenance services" 31. From the above it manifests that the contracts executed by the assessee are composite contracts and there is no bifurcation with respect to the nature of consideration relating to the services rendered. The assessee has not segregated its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the assessee's case would be covered under the India-Australia DTAA. Article 12(3) of the said DTAA provides the definition of Royalty. The Petitioner is granted liberty to claim benefit under the said DTAA before the Ld. CIT if it wishes to do so. Besides, in the event the answer to the question is in the affirmative, the assessee shall also be at liberty to assail such findings on merit, as we have refrained ourselves from determining whether the income of royalty is excluded from the definition under the Act. 33. The writ petition is allowed in the above terms. FOOTNOTE 6 For the sake of reference, the same is reproduced as under: "44D. Special provisions for computing income by way of royalties, etc., in the case of foreign companies. -Notwithstanding anything to the contrary contained in sections 28 to 44C, in the case of an assessee, being a foreign company, - (a) the deductions admissible under the said sections in computing the income by way of royalty or fees for technical services received from an India concern in pursuance of an agreement made by the foreign company with the Indian concern before the 1st day of April, 1976, shall not exceed in the aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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