9911796707
TMI Blog2021 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that the amounts paid by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 - Decided in favour of assessee. - ITA Nos. 2036 to 2039/Bang/2019 - - - Dated:- 31-3-2021 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER Appellant by : Shri. Narendra Sharma, Advocate R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 13,67,53,377/- being the payment made by the appellant to M/s. Ansys Inc. U.S.A. towards the purchase of goods as Royalty for having not done TDS on such payments made by the appellant on the facts and circumstances of the case. 4. The learned authorities below failed to appreciate that the software imported by the Appellant is a shrink-wrapped product and the same not being customized and the same is not in the nature of Royalty and consequently no tax amount be deducted on such payments made by the appellant towards purchases of such software, on the facts and circumstances of the case. 5. The learned authorities further failed to appreciate that the transactions is treated as one of sale of goods and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case are as under: 2.1. The assessee is a company and filed its return of income for assessment year 2007-08 on 09/10/2007 declaring total income of ₹ 3,49,99,541/-. The case was selected for scrutiny and notice was issued under section 143(2). In response to statutory notices, representative of assessee appeared before Ld.AO and called requisite details as called for. 2.2. The Ld.AO observed that assessee had international transaction during the relevant previous year and in order to determine arm s length price case was referred to the Transfer Pricing officer. The Ld.AO observed that, assessee is in the business of import and sale of computer software and the major business of assessee is sale of software. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) and various other decisions. Hon ble Supreme Court held as under: CONCLUSION 168. Given the definition of royalties contained in Article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9(1)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of assessee by following the ratio of Hon ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd. vs CIT (supra). Respectfully following the ration laid down by Hon ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd. vs CIT (supra), and Hon ble Karnataka High Court in assessee s own case for assessment year 2006-07 in ITA No.453 of 2019 by order dated 18/03/2021, we direct the disallowance to be deleted. As the facts are same is all the appeals, the above view is applied to assessment years 2008-10 to 2010-11 mutatis mutandis. Accordingly, grounds raised by assessee stands allowed. In the result appeals filed by assessee for assessment years 2007-08 to 2010-11 stands a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
