TaxTMI 
TaxTMI 
2021 (6) TMI 845
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....ed by assessee against orders dated 22/1/2016 passed by the ITO (Intl. Taxation), Bangalore for assessment years 2010-11 to 2013-14. 2. The assessee is a Singapore based company. It was submitted that assessee is engaged in the business of distribution of Computer Software and providing ancillary services to its Indian distributors/customers. In certain cases assessee also sold hardware to Indian parties. It is submitted that the sale of software/hardware was made outside India, and the sale proceeds of the sale/ancillary services from the Indian distributors/customers were received by assessee outside India. 2.1. For year under consideration, the assessee filed return of Income declaring Nil taxable income. The return was selected fo....
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.... the differential rates. Therefore, we consider it appropriate to direct the AO to adopt the rate specified in the DTAA, in regard to all the remittances made." 2.4. The DRP relied decision of Hon'ble Karnataka High Court in case of M/s. Synopsis International Pvt. Ltd. in ITA No. 11-15/2008 by order dated 3/8/2010 and Samsung Electronics Ltd. reported in 2011-TIL-43-HC-KAR-INTLI. The Ld. AO on receipt of DRP direction passed final assessment orders in all years under consideration. 3. Aggrieved by the order of Ld. AO assessee is in appeal. 4. At the outset it has been submitted by both sides that issues involved in all appeals under consideration as same on identical facts. We are therefore disposing off these appeals by way o....
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....; under the Act and the DTAA are pari-materia i.e. they should be construed with reference to each other. 3.4 The AO and the DRP erred in not holding that the consideration received by the Appellant was not for transfer of copyright to the distributors or end-users but for sale of software/copyrighted product. 3.5 The AO and the DRP erred in not holding that the Appellant does not hold copyright in the software, despite of the fact that it had only distribution/limited rights of the copyrighted product. 3.6 The AO and the DRP failed to appreciate that access to software wherein a subject matter of copyright is embedded, without the right to exploit the copyright, does not amount to use or right to use the copyrigh....
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.... Without prejudice to the ground in para 5.1 above, the AO and the DRP have erred in not applying the rate of tax as per the DTAA even though the Appellant had received the entire consideration in Singapore in respect of the invoices raised during the period 1 April 2011 to 31 March 2012. 5.3 The AO has erred in applying surcharge and cess on the tax computed. 6. Short credit of tax deducted at source The AO has erred in not granting credit of tax deducted at source to the extent of Rs. 647,927. 7. Initiation of penalty The AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act. 8. Relief The Appellant prays that the AO be directed to grant all such re....
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....S"] under section 195 of the Income Tax Act. This judgment dated 15.10.2011 has been relied upon by the subsequent impugned judgments passed by the High Court of Karnataka to decide the same question in favour of the Revenue. The appeals before us may be grouped into four categories: i) The first category deals with cases in which computer software is purchased directly by an end-user, resident in India, from a foreign, nonresident supplier or manufacturer. ii) The second category of cases deals with resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non-resident suppliers or manufacturers and then reselling the same to resident Indian end-users. ....
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....stribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act. The answer to this question will apply to all four categories of cases enumerated by us in paragraph 4 of this judgment. 170. The appeals from the impugned judgments of the High Court of Karnataka are allowed, and the aforesaid judgments are set aside. The ruling of the AAR in Citrix Systems (AJAR) (supra) is set aside. The appeals from the impugned judgments of the High Court of Delhi are dismissed." 13.....