TaxTMI 
TaxTMI 
2018 (5) TMI 1318
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....ITA No. 3312/Del/2016 (Assessment Year 2008-09) 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the consideration received by the assessee from various entities on account of sale of software is not royalty within the meaning of Article 13 of the India-UK DTAA ('DTAA'). 2. Whether the Ld. CIT(A) has erred in not considering the effect of Article 3(2) of the DTAA in terms of which any term not defined in the DTAA is deemed to have the same meaning as it has under the domestic law and therefore, the clarification provided in explanation 4 to section 9(l)(vi) of the Act can be used for interpreting the terms used in Article 13 of the DTAA. 3. Whether on stated facts and in law the Ld CIT(A) has erred in not giving the effect of the subsequent amendment to Section 9(l)(vi) of the Act and also whether the amount received for use of software would be royalty in terms thereof. 4. the appellant craves to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal. ITA No. 2376/Del/2016 (Assessment Year 2009-10) Appeal against the order under section 143(3) read with Section ....
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....ome Tax, Circle 2(2)(1), Intl. Taxation, New Delhi 1. That on the facts and in the circumstances of the case and in law, the assessment order passed under section 144C(1) read with section 147/143(13) of the Income-tax Act, 1961 ('the Act') by the Assessing Officer (' the AO') is erroneous and bad in law as well as in facts. 2. That on the facts and in the circumstances of the case and in law, the AO/Dispute Resolution Panel ("DRP") has erred in law by proposing to hold that the receipt from the sale of software products in India amounting to INR 126, 466, 420 is taxable as 'Royalty' as per the provisions of section 9(1 )(vi) of the Act read with Article 13 of the India-UK Double Taxation Avoidance Agreement ('DTAA'). 3. That on the facts and circumstances of the case and in law, the AO/DRP has erred in law in ignoring the submissions placed on record by the assessee during the course of the assessment proceedings, and in not appreciating that the amount received from the sale of software is business income which in the absence of Permanent Establishment, business income cannot be made taxable in India. 4. That on the facts and circumstances of the case and in law, the ....
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....INR 190, 710, 730 is taxable as 'Royalty' as per the provisions of section 9(l)(vi) of the Act read with Article 13 of the India-UK Double Taxation Avoidance Agreement ('DTAA'). 2. That on the facts and circumstances of the case and in law, the AO/DRP has erred in law in ignoring the submissions placed on record by the assessee during the course of the assessment proceedings, and in not appreciating that the amount received from the sale of software is business income which in the absence of Permanent Establishment, cannot be made taxable in India. 3. That on the facts and circumstances of the case and in law, the Ld. AO has erred in concluding that the assessee had accepted that its receipts are not taxable in India on the basis of the fact that the assessee had not applied for no or nil withholding tax certificates under section 195/197 of the Act. 4. That the AO has erred in charging interest under section 234B of the Act to the assessee. 3. The assessee is a company incorporated in UK. It is engaged in the business of development and distribution of software products. It sells software products in India, either through its distributors or directly to ....
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....9 Taxman. com 88. 6. We have heard both the parties and perused the material available on record. The Distributer Agreement gives non exclusive ratio to only distributor to market and distribute the software products to third parties throughout the territory distributor will Act as independent Contractor only and will neither Act on behalf of Micro Focus nor purport to represent Micro Focus in any way. Thus, the Ld. AR submitted that the consideration received by the micro focus from the customers in India towards off shore supply of software could not be charitable to tax in India under the Act read with India UK Tax. The assessee enters into contracts with its customers on principal to principal basis and that the sale of software licenses is made outside of India. No portion of sale is carried out in India and the payment is made directly by the customers to the bank account in United Kingdom. It is pertinent to note that the Assessing Officer has referred this distributor agreement but has not taken the cognizance of the Clause of these agreements. The submissions made by the Ld. AR clearly set out what are the effects of this Distribution Agreement. In view of Section 90(2) o....
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....g him to do the computer program and storing it in the computer for his own use is only incidental to the facility extended to the licensee to make use of the copy righted product for his internal business purpose. The said process is necessary to make the program functional and to have excess to it and is qualitatively different from the right contemplated by the said paragraph because it is only integral to the use of copy righted product apart from such incidental facilities. The licensee has no right to deal with the product just as the owner would be in a position to do. The licensee has been prohibited from copying, decompiling, de-assembling or reverse engineering the software without the written consent of Infra Soft. The license agreement between Infra Soft and its customers stipulates that all copyrights and intellectual property rights in the software and copies made by the licensee were own by Infrasoft and only Infrasoft has the power to grant license rights for use of the software. The license granted by the Infrasoft is limited to those necessary to enable the licensee to operate the program. The rights transferred are specific to the nature of computer programs. Cop....