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TMI Blog2023 (3) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... ng development of intellectual property and selling its products globally. The assessee filed original return of income for the AY 2019-20 on 31.10.2019 admitting NIL income. The assessee subsequently filed a revised return on 9.4.2020 admitting a total income of NIL and claimed a refund of Rs.14,48,60,999. The return was selected for scrutiny under CASS and statutory notices were duly served on the assessee. 3. During the course of assessment proceedings, the AO noticed that the assessee has disclosed in the original return of income a sum of Rs.132,65,65,935 as sale of standard software to its group company, Microfocus Software Solutions India Pvt. Ltd. on which TDS has been deducted and the assessee has claimed the said income as not ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the same amount as addition by stating that the assessee did not furnish the break-up of software and ancillary support services. Aggrieved, the assessee is in appeal before the Tribunal. 5. Ground Nos. 1 & 7 are general. Ground No.5 is consequential and ground No.6 is premature. Hence these grounds do not warrant separate adjudication. 6. The assessee raised the following relevant grounds:- "2. The Learned AO/ Learned DRP erred in treating the consideration received from ancillary support services as Fee for technical service ('FTS') as per India- United Kingdom of Great Britain and Norther Ireland ('UK') Double taxation Avoidance Agreement ('DTAA') and as per the Income-Tax Act, 1961 ('the Act'). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under similar circumstances:- (i) Informatica LLC v. ACIT, IT(IT)A No.913/Bang/2019 dated 5.7.2021 (ii) Informatica LLC v. ACIT, IT(IT)A No.2867/Bang/2019 dated 5.8.2021 (iii) Blue Yonder Inc. v. DCIT, IT(IT)A No.2696/Bang/2019 dated 12.8.2021 8. The ld DR relied on the order of the DRP. 9. We heard the parties and perused the material on record. We notice that a similar issue has been considered by the coordinate Bench in the case of LLC v. ACIT, IT(IT)A No.2867/Bang/2019 dated 5.8.2021 where it is held that - "6. We notice that an identical issue has been examined by the coordinate bench in the assessee's own case in AY 2016-17 and it has been decided in favour of the assessee with the following observations: 5. Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no deduction of TDS is made under Section 195(1) of the Income Tax Act, or such person has, after applying Section 195(2) of the Income Tax Act, not deducted such proportion of tax as is required, that the consequences of a failure to deduct and pay, reflected in Section 201 of the Income Tax Act, follow, by virtue of which the resident-payee is deemed an "assessee in default", and thus, is made liable to pay tax, interest and penalty thereon. This position is also made amply clear by the referral order in the concerned appeals from the High Court of Karnataka, namely, the judgment of this Court in GE Technology (supra). 47. In all these cases, the "licence" that is granted vide the EULA, is not a licence in terms of Section 30 of the Copyr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pies of the aforesaid book with the permission of the author it can be said that copyright in the book has been transferred by way of licence or otherwise, and what the Indian publisher will pay for, is the right to reproduce the book, which can then be characterized as royalty for the exclusive right to reproduce the book in the territory mentioned by the licence. 52. There can be no doubt as to the real nature of the transactions in the appeals before us. What is "licensed" by the foreign, nonresident supplier to the distributor and resold to the resident enduser, or directly supplied to the resident end-user, is in fact the sale of a physical object which contains an embedded computer programme, and is therefore, a sale of goods, which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will apply to all four categories of cases enumerated by us in paragraph-4 of this judgment. 8. In the light of the aforesaid judgment delivered by the Hon'ble Supreme Court, the question of law framed in the present appeal is decided in favour of the assessee and against the revenue." 6. Further, the judgment relied on by the DRP in the case of Samsung Electronics (supra) was reversed by the Hon'ble Supreme Court in Civil Appeal No.8733-8734/2018 &Ors. in the case of Engineering Analysis Centre for Excellence Private Limited v. CIT &Anr. (supra) which has been extracted in the foregoing paragraph. Being so, the issue before us is already settled by the Hon'ble Supreme Court in favour of assessee." 7. Accordingly, following the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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