2010 (12) TMI 254

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....volved in these appeals is whether the payment made by the assessee to M/s Avaya International Sales Ltd., Ireland in respect of activation charges is in the nature of "Royalty" or "Fees for Technical Services" and the same is raised in the form of following grounds raised by the Revenue which are identical in both these appeals: "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the payment made to AVAYA INTERNATIONAL SALES LTD.,IRELAND("AISL") in respect of activation charges is a payment for buying a standard product/software. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the payment made to AISL can neither be said to be as ....

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....ding to the assessee, the payment made by it to M/s Avaya International Sales Ltd., Ireland against purchases of converged communication solution did not attract deduction of tax at source and accordingly applications u/s 195(2) were filed by the assessee before the A.O. i.e., Asst. Director for authorizing it to make payment of activation charges to M/s Avaya International Sales Ltd., without deduction of tax at source. While disposing of the said application by two separate orders dated 28.3.06 & 22.8.06 passed u/s 195(2), the A.O. held that activation charges paid by the assessee to M/s Avaya International Sales Ltd., Ireland were chargeable to tax being in the nature of "Fees for Technical Services" and accordingly he held that the asse....

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.... record before us and a perusal of the same shows that a similar issue has already been considered and examined by the Tribunal in assessee's own case and after discussing the facts of assessee's case in the light of definition of the term "Fees for Technical Services" given in section 9(1)(vii) of the Act as well as in Article 12 of DTAA between India and Ireland, the Tribunal has decided the issue in favour of the assessee for the following reasons given in para 17 of its order:- "In the light of above discussion and consideration of facts of the case, we find that the CIT(A) has rightly held that activation charges paid to AISL are part and parcel of the equipment supplied by them to the assessee. This fact is fully supported by the f....