TaxTMI 
TaxTMI 
2019 (1) TMI 468
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....enses, seminar expenses; and (c) Payments in the nature of reimbursement of software and license renewal. 4. The Assessing Officer came to the conclusion that such payments made by the assessee attracted withholding tax provisions and as such the assessee was required to deduct tax at source on such payments rendering the assessee as "assessee in default" section 201 (1) of the Act. By treating the assessee as assessee in default the Assessing Officer levied a tax demand u/s 201 (1) and interest u/s 201(1A) of the Act. 5. Aggrieved, the assessee agitated the matter before the CIT(A) but without any success. 6. Before us the counsel for the assessee vehemently stated that all the payments made to non-resident were reimbursement of travel expenses, research expenses and seminar, training and conference expenses. It is the say of the counsel that all the reimbursement are duly supported by the invoices alongwith certificate of the Chartered Accountant accordingly reliance was placed on the decision of Hon'ble High Court of Bombay in the case of Krupp Udhe GmbH 354 ITR 173. Reliance was also placed on the decision of the Hon'ble High Court of Delhi in the case of Indu....
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.... 2 - Taxability' of reimbursements in the nature of software license and renewal .payments Pernod Ricard, France Reimbursement of software and license renewal expenses EUR 4,050 June 14, 2007 Pernod Ricard, France Reimbursement of software and license renewal expenses EUR 16,200 June 26, 2007 Integralis SAS Reimbursement of software and license renewal expenses EUR 2.103 June 26,2007 integralis SAS Reimbursement of software and license renewal expenses EUR 5,678 June 26, 20 Integralis SAS Reimbursement of software and license renewal expenses EUR 5,702 October 16, 2007 Swedley Place Ltd. UK Design Development charges GBP 12,500 (Tax already deducted and deposited of GBP 1,822) January 10, 2008 Pernod Ricard, France Reimbursement of software and license renewal expenses EUR 27,000 January 30, 2008 Integralis SAS Reimbursement of software and license renewal expenses EUR 4,284 February 22, 2008 9. It is a settled principal of law that any payment made to non-reside....
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....etween the judgment of the Kerala High Court, which was relied upon by the Commissioner of Income - tax (Appeals) and the judgment of the Calcutta High Court in the case of CIT v. Dunlop Rubber Co, Ltd. [1983] 142 ITR 493 / [1982] 10 Taxman 179, it would follow a view which was favourable to the assessee, consistent with the judgment in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). 6. The question as to whether a reimbursement for expenses would form part of the taxable income is not res integra in so far as this court is concerned. In CIT v. Siemens Aktiorigesellschaft 120091 310 ITR 320/177 Taxman 81. a Division Bench of this court held that it was in agreement with the view taken by the Calcutta High Court in Dunlop Rubber Co. Ltd. case (supra) and by the Delhi High Court in CIT v. Industrial Engineering Projects (P.) Ltd. 119931 202 ITR 1014 (Delhi). The observations of this court in Siemens Aktiongesellschaft (supra) are as follows (page 340): "That leaves us with the last contention as to whether the amounts by way of reimbursement are liable to tax. To answer that issue, we may gainfully refer to the judgment of a Division Bench of the Delhi High C....
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....ssessee is not liable for withholding tax u/s 195 of the Act. Ground No.4 to 7 taken together is allowed. 13. The next quarrel is in respect of reimbursement of software and licenses renewal. The Assessing Officer has treated the payments as royalty. Drawing support from the Indian Copy right Act 1957 the Assessing Officer was of the firm belief that the payment for the certain software is royalty. The Assessing Officer observed that as per provision of section 9 the payment made for import of software are royalty payment. The Assessing Officer further observed that the payments are for the use of copy right itself and not for the use of copy righted article. The Assessing Officer accordingly treated the income from software licenses in the nature of royalty. 14. The CIT(A) confirmed the findings of the Assessing Officer. 15. Before us the counsel for the assessee reiterated what has been stated before the lower authorities. 16. We have carefully perused the orders of the authorities below and have also considered the relevant invoices brought on record in the paper book filed. On perusal of the invoices supported by the certificate from a Chartered Accountant show that....
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....icensee use of the Software in the event that the Licensee is in breach of payment terms or any other provisions of this Agreement. All copyrights and intellectual property rights in and to the Software, and copies made by Licensee, are owned by or duly licensed to Infrasoft. 89. The Licensing Agreement shows that the license is non-exclusive, nontransferable and the software has to be uses in accordance with the agreement. Only one copy of the software is being supplied for each site. The licensee is permitted to make only one copy of the software and associated support information and that also for backup purposes. It is also stipulated that the copy so made shall include Infrasoft's copyright and other proprietary notices. AH copies of the Software are the exclusive property of Infrasoft. The Software includes a licence authorisation device, which restricts the use of the Software. The software is to be used only for Licensee's own business as defined within the Infrasoft Licence Schedule. Without the consent of the Assessee the software cannot be loaned, rented, sold, sub-licensed or transferred to any third party or used by any parent, subsidiary or affiliated....