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TMI Blog2024 (11) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... pending on the existence of a PE in the Contracting State. Decided in favour of assessee. - Shri Narendra Kumar Billaiya, Hon ble Accountant Member And Shri Sunil Kumar Singh, Hon ble Judicial Member For the Assessee : Shri Akshay Kumar, A/R For the Revenue : Shri Vivek Perampurna, D/R ORDER PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 18/10/2023 framed u/s 143(3) r.w.s. 144C(13) of the Act, pertaining to AY 2021-22. 2. The grievance of the assessee reads as under:- 1. General 1.1. The order of the learned Assessing Officer ( AO ) is contrary to canons of equity and natural justice, contrary to law and facts involved, not based on facts and circumstances of the case, contrary to mandatory provisions of the Income-tax Act, 1961 ( Act ), lacks jurisdiction and is liable to be struck down. 1.2. The learned AO has erred in law and on facts in computing the total income of the Appellant at INR 1,05,78,50,059/-. 2. Taxability of receipts towards sale of software products 2.1. The Honourable DRP has erred in upholding the draft assessment order after rejecting the Appellant's objections, even as it noted that the binding decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.8. The learned AO erred in levying interest under section 234B of the Act. Each of the above ground is independent and without prejudice to the other grounds of appeal preferred by the Appellant. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Honourable Income Tax Appellate Tribunal to decide this appeal according to law. 3. At the very outset, the ld. Counsel for the assessee stated that the impugned issues have been decided in favour of the assessee and against the revenue in assessee s own case for earlier AYs 2003-04 to 2019-20. It is the say of the ld. Counsel that the impugned quarrel is now well-settled by the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Limited v. CIT [2021] 432 ITR 471 (SC). Per contra, the ld. D/R could not bring any decision in favour of the revenue and strongly relied upon the findings of the lower authorities. 4. We have given a thoughtful consideration to the orders of the authorities below. 5. Briefly stated the facts of the case are that the assessee filed its return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is a review petition pending in the Supreme Court and therefore, the Court may dispose the appeal with liberty to appellant to approach this Court to either revive the appeal or file a fresh appeal in case the review petition is allowed in favour of Revenue. 2. Appeal disposed with liberty as prayed for. 8. This quarrel has attained finality by the decision of the Hon ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Limited v. CIT [2021] 432 ITR 471 (SC). The most relevant findings of the Hon ble Supreme Court reads as under:- 156. It is significant to note that after India took such positions qua the OECD Commentary, no bilateral amendment was made by India and the other Contracting States to change the definition of royalties contained in any of the DTAAs that we are concerned with in these appeals, in accordance with its position. As a matter of fact, DTAAs that were amended subsequently, such as the Convention between the Republic of India and the Kingdom of Morocco for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes On Income, 17 India-Morocco DTAA ], which was amended on 22-10-2019,48 incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions on the basis that they are to be taxed either on income by way of royalties for parting with copyright, or income derived from licence agreements which is then taxed as business profits depending on the existence of a PE in the Contracting State. 160. The learned Additional Solicitor General, however, relied upon the HPC Report 2003 and the E-Commerce Report 2016. The HPC Rol 2003, noting the various characterisation issues in relation to e-commerce payments, recommended as follows: ...The Committee also recommends that a clear position on each category of transactions should be taken by the Central Board of Direct Taxes ('CBDT ). This will ensure uniformity of approach among all the assessing officers. Since new categories of transactions are likely to emerge at a fast pace with advances in technology, it is also recommended that the CBDT should closely monitor the developments and issue guidelines to the assessing officers on new emerging categories of transactions as a continuing process. The monitoring should be troupe an expert advisory body on which the tax administration, the professions and the concerned industry is represented. 161. The E-Commerce Report 2016 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State shall endeavour to foster respect for international law and treaty obligations. As a result, rules of international law which are not contrary to domestic law are followed by the courts in this country. This is a situation in which there is an international treaty to which India is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India is a signatory nation to an international treaty, and a statute is passed pursuant to the said treaty, it is a legitimate aid to the construction of the provisions of such statute that are vague or ambiguous to have recourse to the terms of the treaty to resolve such ambiguity in favour of a meaning that is consistent with the provisions of the treaty. (3) In a situation where India is a signatory nation to an international treaty, and a statute is made in furtherance of such treaty, a purposive rather than a narrow literal construction of such statute is preferred. The interpretation of such a statute should be construed on broad principles of general accept ..... X X X X Extracts X X X X X X X X Extracts X X X X
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