TaxTMI 
TaxTMI 
2020 (12) TMI 527
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder of the learned Commissioner of income Tax (Appeals) - 9, Bangalore (hereinafter referred to as CIT(A)), to the extent prejudicial to the Appellant is bad in law. GROUND RELATING TO SECTION 201: 2. The learned CIT(A) has erred in confirming the action of the AO in; a) Not appreciating the fact that, the requirement for withholding tax on purchase of software was mandated vide Finance Act 2012 as well as Karnataka High Court decision in the case of CIT vs. Samsung Electronics Co Ltd 203 Taxman 477 (Karnataka), which were not in force when the Appellant complied with TDS provisions. The Appellant was therefore not required to deduct tax at source at the time of purchase of software license; b) Not appre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble. Even otherwise the interest levied under section 201(IA) is excessive. The Appellant denies its liability to pay interest under section 201(IA). The Appellant submits that each of the above grounds/ sub-grounds are independent and without prejudice to one another. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Income-tax Appellate Tribunal to decide the appeal according to law. The Appellant prays accordingly." ITA No. 2020/B/2019 "1. The Order of the learned Commissioner of Income Tax (Appeals) - 9, Bangalore (hereinafter referred to as CIT(A)), to the ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t prejudice to one another. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Income- tax Appellate Tribunal to decide the appeal according to law. The Appellant prays accordingly. Brief facts of the case are as under: 2. Assessee is engaged in the business of designing, engineering, manufacturing, supplying, trading, sub contracting, installation and commissioning and after sales services for largescale filtration system and fermentation system. During the year under consideration assessee purchased computer software from both residents and non-resident vendor is. The computer softwa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hholding tax on purchase of software was mandated by Finance Act, 2012. During the relevant period under consideration assessee was not required to deduct tax at source is for purchase of software licenses. It was thus submitted that provisions of section 201(1) and (1A) could not be applicable to the year under consideration. 8. Ld.CIT(A) concluded that, assessee should have deducted TDS under section 195(2) by virtue of decision of Hon'ble Karnataka High Court in case of CIT vs Samsung Electronics Co.Ltd., & Ors. (Supra). 9. In appeal filed against order passed by Ld. AO under section 271C, Ld.CIT(A) upheld action of Ld.AO by holding that, assessee could not establish a reasonable cause for failure to deduct tax. He relied on ord....
X X X X Extracts X X X X
X X X X Extracts X X X X
....license to use software. In the instant case, assessee was under bonafide belief that it was not required to deduct tax at source from the payments made for purchase of software, which was supported by following decisions of coordinate bench of this Tribunal at the relevant time: (a) Teekays Interior Solutions P Ltd (ITA No.400/Bang/2017) (b) Infineon Technologies India P Ltd (IT(TP)A No.405/Bang/2015) (c) GE Medical Systems India P Ltd (ITA 1368/Bang/2019) (d) WS Atkins India P Ltd (2015)(41 ITR(T) 397)(Bang. Trib) Subsequently, Hon'ble Karnataka High Court in CIT vs. Samsung Electronics Co. Ltd(supra) held that the payments made for purchase of software was in the nature of royalty and the said decis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....chase of licensed software prior to 15.10.2011, being the date of pronouncement of the decision in the case of Samsung Electronics Co. Ltd (supra). Accordingly, the demand raised in the hands of the assessee u/s 201(1) and 201(1A) for assessment years 2009-10 to 2011-12 could not be sustained and the demands raised in respect of payments made prior to 15.10.2011 in assessment year 2012-13 could also not be sustained. 8. Accordingly, we set aside the orders passed by Ld CIT(A) for assessment years 2009-10 to 2011-12 and direct the AO to delete the demands raised u/s 201(1) and 201(1A) of the Act. We also modify the order passed by Ld CIT(A) for assessment year 2012-13 and direct the AO to delete the demands raised in respect of paym....