9911796707
TMI Blog2022 (6) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... g to grounds of appeal for AY 2010-11 which read as under :- "1. General Grounds: 1.1. That the Commissioner of Income Tax (Appeals)-42, New Delhi (hereinafter referred to as "Ld. CIT(A)" has erred in facts and in law in upholding the assessment order and assessing the income at INR 11,26,56,700 as against return income of NIL. 1.2. That on fact and in circumstance of the case and in law, the Ld. CIT(A) has erred in rejecting the application filed u/s 158A of the Act to avoid repetitive appeal on the issue which is pending before the Hon'ble Delhi High Court. 2. Grounds on taxability of Software License: 2.1. That on facts and in law, the Ld. CIT (A) has erred in not accepting the contentions of the Appellant that reimburs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, the Ld. CIT(A) has completely ignored the ruling by Hon'ble Supreme Court in case of A.P. Moller Maersk AS (2017) 392 ITR 186 holding that reimbursement of communication network charges is not taxable. 3.2. That the Ld. CIT(A) has also failed to appreciate that the Hon'ble AAR while pronouncing its order has held only software charges as Royalty, and thus has erred in taxing Global technology charges and G WAN connectivity charges as Royalty . 3.3. That the Ld. CIT(A) has erred in facts and in law in holding that no appeal is maintainable on above ground as the matter is pending under rectification application filed before Hon'ble AAR in appellant's own case." 4. Brief facts of the case are that EY Global ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act and the treaty. 4.2 In background of the AAR order, the Ld. AO proceeded to frame assessment for the subject year and passed the final assessment order vide order dated 30 November 2018 whereby, the following payments were held taxable @ 10% as "Royalty" under the Act as well as the treaty: * Software license and Maintenance charges: INR 7,28,25,439/- * Global Technology Charges : INR 3,65,90,140/- * GWAN Connectivity Charges : INR 32,41,122/- The reasoning for the above action of AO in detail are as follows. 5. Assessing Officer (AO) in the assessment order noted that the assessee had filed an application before the Hon'ble Authority for Advance Ruling (AAR) on 09.02.2011 for ascertaining the taxability in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of Article 5 of the India- UK Tax Treaty, whether the payments received by EYGSL UK would be chargeable to tax in India? 5. Based on the answers to Questions above, would the receipts by EYGSL UK from EYGBS India suffer withholding tax under section 195 of the Act, and at what rate? 9. Answers given by the Hon'ble AAR "36. In view of discussions in earlier paragraphs the following rulings are pronounced with respect to question raised:- Q.1 Consideration received on account of provision of services/deliverables is not FTS. Q.2 Consideration received amounts to receive fees and it does not amount to reimbursement of expenses. Q.3 Consideration received for giving right to benefit from the computer software procu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant portion of ld. CIT(A)'s order reads as under :- "5.5 The appellant has contended to apply the provisions of section 158A of the act which deals with a situation where an assessee claims that any question of law arising in his case for an assessment year which is pending before the Assessing Officer or any appellate authority is identical with a question of law arising in his case for another assessment year which is pending before the High Court on a reference under section 256 or before the Supreme Court on a reference under section 257 or in appeal under section 261. I find that the provisions of section 158A are not applicable in this case because of the fact that the appellant has filed writ before Hon'ble High court against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding upon the Revenue authorities. The provisions of section 295S reads as under :- "245S. (1) The advance ruling pronounced by the Authority under section 245R shall be binding only- (a) on the applicant who had sought it; (b) in respect of the transaction in relation to which the ruling had been sought, and (c) on the Principal Commissioner or Commissioner, and the income-tax authorities subordinate to him, in respect of the applicant and the said transaction. (2) The advance ruling referred to in sub-section (1) shall be binding as aforesaid unless there is a change in law or facts on the basis of which the advance ruling has been pronounced." 11. Once it is clear that the Revenue authorities only followed the ruling of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
