TaxTMI 
TaxTMI 
2016 (11) TMI 1651
X X X X Extracts X X X X
X X X X Extracts X X X X
....re delivered directly to the end customers by the assessee, and they could load the software using the licence keys provided by the assessee. Further as per ld. Authorised Representative, DSSPL was only a distributor of the software product and never obtained a right to copy or commercially exploit the software. Submission of the ld. Authorised Representative was that ld. Assessing Officer considered the amount received by the assessee from DSSPL as royalty income, accruing or arising in India in terms article 9(1)(vi) of the Act, erroneously. As per ld. Authorised Representative, Assessing Officer had come to an erroneous conclusion that amount received from DSSPL fell within the definition of 'Royalty' under article 12 of the Double Taxation Avoidance Agreement (herein after referred to as the ''DTAA'') between India and USA. Further, as per ld. Authorised Representative, ld. Commissioner of Income Tax (Appeals) had confirmed this view disregarding the Tribunal order for earlier years in assessee's own case, where it was held that the amounts were not in the nature of Royalty. Reliance was placed by the ld. Authorised Representative on decisions dated 09.01.2014 of Co-ordinate Be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... could be Royalty in terms of the Act, were irrelevant since assessee was covered under DTAA which was more beneficial to him. 6. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed by the Revenue that payments received by the assessee from DSSPL were based on same regional support agreements between assessee and DSSPL which was considered by the Co-ordinate Bench of this Tribunal in ITA Nos.1698 to 1702/Mds/2010, in its order dated 16.09.2011. So the payments received by the assessee during the relevant assessment year from DSSPL was of the same nature as what were received by it from the said concern in the previous year relevant to assessment years 2002-03 to 2006-2007. In its order dated 16.09.2011, this Tribunal had followed the decision of Special Bench in the case of Motorala Inc. vs. DCIT 95 ITD 269 and had held as under:- ''15. We have heard the rival submissions and perused the orders of the lower authorities and the material available on record. In the instant case, we find that no specific error in the order of the ld. CIT(A) could be pointed out by the ld. D.R. We find that the ld. CIT(A) has followed the de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on is as to what is that a customer pays for when he buys, or to put it in technical terms 'obtains licence to use the software for the process of executing the instructions in the software, or for the results achieved on account of use of the software. To draw an analogy, it is akin to a situation in which a person hires a vehicle, and the question could be as to what does he pay for - for the use of the technical knowhow on the basis of which vehicle operates, or for the use of a product which carries passengers or goods from one place to another. The answer is obvious. When you pay for use of vehicle, you actually pay for a product which carries the passengers or goods from one place to another and not the technical knowhow on the basis of which such a product operates. Same is the case with the software, when someone pays for the software, he actually pays for a product which gives certain results, and not the process of execution of instructions embedded therein. As a matter of fact, under standard terms and conditions for sale of software, the buyer of software is not even allowed to tinker with the process on the basis of which such software runs or to even work around t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw being enacted on the basis of pragmatism. Similarly, the rules relating to interpretation are also based on commonsense approach. Suppose a man tells his wife to go out and buy bread, milk or anything else-she needs, he will not normally be understood to include in the terms "anything else she needs" a new car or an item of jewellery. The dictum of ejusdem generis refers to similar situation. It means of the same kind, class or nature. The rule is that when general words follow particular and specific words of the same nature, the general words must be confined to the things of same kind as specified. Noscitur a sociis is a broader version of the maxim ejusdem generis. A man may be known by the company he keeps and a word may be interpreted with reference to the accompanying words. Words derive colour from the surrounding words." 16. In the instant case, we find that the assessee sold copy righted software and not copyright in the software. Therefore, we do not find any good reason to interfere with the order of the ld. CIT(A). It is confirmed. Grounds of appeal taken by the Revenue are dismissed''. In a later decision dated 09.01.2014 in ITA No.1024 to 1027/Mds/2013 and 11....