TaxTMI 
TaxTMI 
2013 (10) TMI 769
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.... learned D.R. fairly admitted that the matter was covered against the Revenue by virtue of decision of this Tribunal. Nevertheless, according to him, once invoices were raised, it constituted a sale and therefore, assessee was bound to account for it. 5. We have heard the contentions. On the issue regarding accounting of invoices on services which were still to be rendered, this Tribunal held on Revenue's appeal for assessment year 2003-04, at paras 31 to 35 of its order, as follows:- "31. It was noticed by the A.O. during assessment proceeding that in the balance sheet as on 31.03.2003 Rs. 45,67,354 was shown as 'unearned income' under the head 'current liabilities' as against Rs. 15,13,162 shown as on 31.03.2002. The details furnished by the assessee showed that Rs. 39,68,208 received during the year ending 31.03.2003 was not offered for tax and was carried forward to next year. The assessee explained as under:- "For revenue relating to development of e-learning software. The invoices are raised on the basis of payment milestones where as revenue are recognized on the basis of the modules developed and delivered. Though the payments has been received on the basis of i....
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....tion Services Limited was assigned the responsibility to 'sign off' on completion of the project in the case of all customers, that the assessee-company was following the AS 9 prescribed by the Institute which was in conformity with the provisions of Section 145(2) of the Act. The assessee was regularly following the 'project completion method, which is a recognized method. The completion of each project is determined by 'sign off'. There is nothing on record to show that there was any inconsistency in this regard. The CIT(A) found that the deferred income amounting to Rs. 39,68,208 was carried forward and was duly taken into account in the next assessment year. In the circumstances, therefore, we see no reason to interfere with the conclusions reached by the CIT(A). The ground no. 4 is, accordingly rejected." Since it has been conceded by both the parties that the fact situation is very similar for impugned assessment year also, we cannot fault ld. CIT(Appeals) for deleting the addition made by the Assessing Officer. 6. Ground No.2 of the Revenue stands dismissed. 7. Vide its ground No.3, grievance of the Revenue is that the CIT(Appeals) deleted the disallowance made unde....
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....pments. Consequently, the Assessing Officer held that the appellant committed default u/s 195 in so far as it had not deducted tax at source. He therefore, worked out short deduction of tax u/s. 201(1) at Rs.3,45,99,751/- and Rs.3,33,39,659/- for A.Ys. 2002-03and 2003-04 respectively. The Assessing Officer also charged interest u/s. 201(1A) amounting to Rs.1,99,6S,927/- and Rs.1,52,71,474/- for A.Ys. 2002-03 and 2003-04 respectively. The Assessing Officer has, therefore, taken the following arguments for raising the impugned demands. (1) The service provided by the Telecommunication service Provider in the case is different from that provided by the non- resident companies in the present case. (2) Telephone is fundamentally different from a bandwidth service. (3) The bandwidth service is not a specified service. (4) Equipment of the nonresident company through which connectivity is provided is used by the assessee the requisite bandwidth along with equipments is for exclusive for the assessee which cannot be used by others nor by the non- resident company; on termination of the agreement the assessee must cease to use the service and all equipment of the non-resident co....
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...., therefore, royalty means the payment of any kind received as a consideration for the use of' or the right to use, any copy right of literary artistic or scientific work but, does not include the words 'use' or right to use, industrial, commercial or scientific equipment. In the appellant's case there is no "right to use equipment. Therefore, the payments made do not fall under 'royalty'. On similar facts the ITAT, Bangalore Bench in the case of ACIT Vs. Infosys Technologies Ltd. in ITA Nos. 653 and 969/Bang/2006 dated 17-10-2007 held that any payment made to database owners outside India for accessing such databases and the services provided by such telecom operator to the customers do not amount to technical services or royalty u/s 9(1)(vii) of the IT Act. Accordingly, it was held that no TDS is to be made. The Hon'ble Tribunal also held that payments for accessing data is like reading a book in a library which could not be passed on to anyone else. Since the copyright was not for literary, artistic or scientific work, the payment is not to be treated as royalty and it was held that no TDS was required to be made. The Hon'ble ITAT, Bangalore Bench in the case of ITO Vs. Madhura ....