2023 (3) TMI 910

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... sum and substance, the assessee has sold copyrighted articles and not the copyright in the software. The ratio laid down by the Hon ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] would squarely apply to assessee s case. The amount received by the assessee from sale of software is not in the nature of royalty under Article 12(3) of India USA DTAA. Accordingly, we direct the Assessing Officer to delete the addition. Grounds are allowed.
Shri G.S. Pannu, Hon'ble President And Shri Saktijit Dey, Judicial Member For the Appellant : Sh. Nageshwar Rao, Advocate, Ms. Deepika Aggarwal, Advocate For the Respondent : Sh. Sanjay Kumar, Sr. DR ORDER PER SAKTIJIT DEY, JM: This .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 019 treating the amount received as royalty. However, finding that various mistakes have crept into the assessment order, on the very same date, the Assessing Officer passed an order purportedly under section 154 read with section 143(3) of the Act holding that the amount received by the assessee towards sale of software is in the nature of royalty under Article 12(3) of India - USA DTAA. While coming to such conclusion, the Assessing Officer heavily relied upon the decision of the Hon'ble Karnataka High Court in case of CIT Vs. Samsung Electronics Co. Ltd. [TS-696-HC-2011 (Ker.)] and another decision of the Hon'ble Karnataka High Court in case of CIT Vs. Synopsis International Old Ltd. (ITA No.15&17 of 2008). He did not apply the ratio lai .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... copyright in the software. 5. It is further observed, the departmental authorities, while treating the amount received from sale of software as royalty, have heavily relied upon the decision of the Hon'ble Karnataka High Court in case of Samsung Electronics Ltd. (supra). However, the issue is no more res intera in view of the authoritative ratio laid down by the Hon'ble Supreme court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT (2021) 432 ITR 471, wherein, the Hon'ble Supreme Court after interpreting the meaning of royalty as defined in the Income Tax Act and various treaties as well as under the Copyright Act, has concluded that where the consideration received is for sale of a copyrighted Article, it cannot be .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X