9911796707
TMI Blog2024 (8) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) TMI 138 - SUPREME COURT ] and the orders passed by this Court in Reliance Industries [ 2024 (6) TMI 1069 - BOMBAY HIGH COURT ] and Lucent Technologies [ 2024 (7) TMI 969 - BOMBAY HIGH COURT ] the appeal is accordingly dismissed. - G. S. KULKARNI SOMASEKHAR SUNDARESAN, JJ. For the Appellant : Mr. Suresh Kumar,. For the Respondent : Ms. Priyanka Jain a/w Mr. Pankaj Soni i/b Vaish Asso.,. P.C. INCOME TAX APPEAL NO. 177 OF 2018 1. This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961, (for short IT Act ) although has raised several questions of law, the question of law which would arise for consideration is whether the payments received by the respondent / assessee for supplying Computer Software were liabled to be taxed as royalties under the provisions of Section 9 (1) (vi) of the IT Act. 2. The Assessment Year is 2012-13. Learned counsel for the parties are ad idem that the question on purchase of software from a foreign supplier had fallen for consideration for this Court in the batch of appeals ( Commissioner of Income Tax-(LTU) Vs. Reliance Industries Ltd. (Income Tax Appeal No. 1655 of 2018 connected matters) wherein this Court considering the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard Learned Counsel for the parties. The relevant facts which are not in dispute and common to these proceedings are as follows: 7. In regard to the assessment years in question, the Respondent-assessee filed its return of income declaring NIL income, and also claimed Tax Deducted at Source ( TDS ) from the payments received from the purchasers (referred as Reliance ). The return as filed by the Respondent was taken up for scrutiny by issuance of notices under Section 143 (2) read with Section 142 (1) of the Income Tax Act, 1961 ( the Act ). The assessing officer was of the view that receipts of the amounts in question from Reliance were on account of supply of the copyright software as per the terms of the Wireless Software Assignment and License Agreement. However, the case of the assessee was to the effect that the amount was a business income and was not taxable in India, in the absence of or assessee having a Permanent Establishment (PE) in India. 8. The Respondent-assessee contended that the Revenue receipts were in terms of the sale, as the software is supplied to Reliance was not a customized software, but a software which was sold to several clients. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of Section 9 (1) (vi) of the Act had fallen for consideration of the Court in Income Tax Appeal No.1655 of 2018 alongwith connected Writ Petition No. 1737 of 2018, Writ Petition No.1842 of 2018 Writ Petition No.1850 of 2018, decided by this Court on 21st June, 2024. Also a batch of appeals filed by the Revenue on similar issues filed against the Reliance Industries Ltd., came to be disposed of by an order dated 24th June, 2024. 12. We have perused the said orders. Learned Counsel for the parties are in agreement that the issue of law which we have noted hereinabove and which has arisen for the consideration of the Court in the case of Commissioner of Income Tax (LTU) Vs. Reliance Industries Ltd. (supra) would in fact answer, the question of law as raised in the present appeals. 13. Mr. Pardiwalla has submitted that once in respect of the party making payment to the assessee, such question of law had fell for consideration of the Court and was gone into in the proceedings of such party which had made payment to the present assessee, and when the Court had come to a considered view that the payment for software which was supplied by the assessee was not liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med:- Whether the payments made by the assessee for obtaining computer software were liable to be to taxed in India as royalties under the provisions of Section 9 (1) (vi) of the Act? 6. We have heard the Learned Counsel for the parties. We have been taken through the impugned orders passed by the Tribunal. 7. The Tribunal considering the provisions of the IT Act, as also the position in law as laid down in various decisions has observed that the assessee had made purchases of computer software from the residents of Denmark and Finland. It was observed that such purchases would fall within the provisions of the Double Taxation Avoidance Agreement ( DTAA ) entered between India and these countries. The Tribunal also observed that a co-ordinate Bench of the Tribunal in the assessee s own case in ITAS No.2529/Mum/2008 and ITAS No.4587/Mum/ 2010 had held that in such cases similar remittances made to the residents of Germany and France, were held to be not liable for deduction of tax at source. The Tribunal, following the decision of its co-ordinate Bench, in assessee s own case, dismissed the appeal filed by the Revenue by the impugned order. 8. At the outset, Learned Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 195 (1) of the Act to deduct tax at source as the distribution agreements, in the facts of the case did not create any interest or right in such distributors/end users, which amounted to the use or right to use any copyright. It was held that the provisions of Section 9 (1) (vi) of the Act along with Explanation 2 and 4 thereof which dealt with royalty, not being more beneficial to the assessee, had no application in the facts of the case. It would be appropriate to extract the conclusion as rendered by the Supreme Court in which reads thus:- 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -(LTU) vs. Reliance Industries Ltd. (supra). P.C.: 1. We have heard learned counsel for the parties. 2. We have listed these appeals as the parties are ad idem that they would stand covered by the order dated 21 June, 2024 passed by this Court in Income Tax Appeal No. 1655 of 2018 [Commissioner of Income Tax-(LTU) vs. Reliance Industries Ltd.]. We, however, find that some of these appeals, on account of prior orders passed by the Division Bench directing service of the appeals on the respondent and on failure to take appropriate steps the appeals stood dismissed without further reference to the Court. We are, however, informed that in fact, in many of these appeals, the respondent, on service of the proceedings by the department, had already filed vakalatnama and therefore, there was no need for further steps to be taken by the department to serve the respondent/assessee and hence the automatic order was not applicable. This is also agreed on behalf of the respondent/assessee. In this view of the matter, we restore to the file of this Court all the appeals which came to be automatically dismissed by such orders passed by the Division Bench. 3. Office to accordingly take further app ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
