TaxTMI 
TaxTMI 
2009 (7) TMI 1264
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....as placed reliance on the order of the Hon'ble ITAT, Bangalore Bench in the case of M/s Samsung Electronics Ltd. (94 ITD 91) and dismissed the department's appeal. However, while passing the order relied upon, the learned CIT(A) has not taken into account the fact that the impugned transaction was not one of outright sale of software but was a license for limited use thereof. ii) Further, in the order relied upon-in the case of M/s Samsung Electronics Co. Ltd. - the Hon'ble ITAT has placed reliance on the judgement of the Hon'ble Supreme Court in the case of Tata Consultancy Services vs The State of Andhra Pradesh (157 KLJ 345 (2004). However, while doing so, it has not taken into account the fact that the Hon'b....
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.... required to be deducted on acquisition of software in favour of the assessee after relying on the decision of this Bench. The payment for acquisition of software is neither in the nature of royalty as per section 9(1)(vi) nor did it constitute fees for technical services as per provisions of section 9(1)(vii). The learned CIT(A) held that tax is not required to be deducted on the acquisition of software after observing as under:- "Coming to the merits, the learned CIT(A) had earlier taken the view that the payment made by the appellant for procuring Microsoft licenses was in the nature of payment for a copyright article and following the decision of Hon'ble ITAT, Bangalore Bench in the case of Samsung Electronics Ltd. reported....
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.... Hon'ble ITAT, Bangalore Bench in ITA Nos.948 to 950/Bang/2005 and ITA No.530/Bang/2006 dated 5.2.2007 held in favour of the appellant after examining the relevant clauses of the cost sharing agreement between the appellant and CGI Group Inc. Quebec, Canada, the extract of which is reproduced below:- 1. "CGI Group Inc. has developed an internal telecommunication and communication tool, which is accessible only to the members of CGI worldwide. This is historically knows as CGI Information Technology Infrastructure CGI Group Inc. is the absolute owner of the CGI Information Technology Infrastructure facility and holds the Intellectual Property Rights (IPR) for the same but no licenses are transferred to CGI-India. This is purely ....
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....in any manner transfer the right assigned therein to other properties. 5. Any right in respect of CGI Information Technology Infrastructure or whatsoever in respect of any invention, improvements and other intellectual property rights in respect of CGI Information Technology Infrastructure or products shall vest with CGI Group Inc.". 6.1 The Hon'ble ITAT, Bangalore Bench therefore, made the following observations:- CGI Group Inc. had developed an internal telecommunication and communication tool which is accessible to the members of CGI Worldwide known as CGI Information Technology Infrastructure. CGI Group Inc. is the absolute owner of the Intellectual Property Rights (IPR) and no licenses are transferred ....
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....that the facts in the case of Modicon Net Work (Supra) decided by Delhi Bench of the Tribunal is identical to the present case. In that case, the joint venture of three companies was formed a consortium for the purpose of bidding for operation GSM-based Cellular Services in India. The respective members of the consortium undertook their own pre-bid expenses till such time the bid was successful, which was to be reimbursed out of capital of assessee company. According to the agreement, the assessee reimbursed the expenses to HK Company. The Assessing Officer was of the view that such payment is to be treated as fees for technical services and section 195(1) is applicable. The Tribunal upheld the finding of CIT(A) in that case by rejecting re....