TaxTMI 
TaxTMI 
2021 (9) TMI 1337
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....17 and the appeal, bearing ITA No. 6273/Del/2017, for assessment year 2014-15 is directed against the order dated 21.07.2017. Since identical issues are involved in these appeals, they were heard together and disposed off by way of this consolidated order for the sake of convenience. 2. Being identical issues in all the appeals, the grounds raised in ITA No. 6273/Del/2017 for AY 2014-15 are reproduced as under for the sake of brevity: 1.1 That in the facts and circumstances of the case, and in law, the Ld. CIT(A) erred In deleting the addition made by the AO, and in holding that the revenue received by the assessee from supply of software is not taxable in India as royalty/s 9(l)(vi) of the Income Tax Act, as well as Article 13(3) of the....
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....e parties through Video Conferencing and perused the relevant material on record, especially the orders of the Tribunal referred by the learned counsel. 6. On perusal, we find that identical issues has been decided by this Tribunal in favour of the assessee in ITA No. 6272/Del/2017 (supra). The relevant findings of the order of the Tribunal (supra) read as under: "8. A similar quarrel was decided by the Tribunal in favour of the assessee and against the Revenue in a bunch of appeals in ITA Nos.4866/Del/2010 and others vide order dated 04.04.2014. This order of the Tribunal was confirmed by the Hon'ble High Court of Delhi in ITA Nos.119 to 157/2015 vide order dated 27.02.2015. The relevant findings of the Hon'ble High Court of Delhi read ....
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....R 470 wherein identical argument with respect to whether consideration paid towards supply of software along with hardware - rather software embedded in the hardware amounted to royalty. After noticing several contentions of the revenue, this Court held in Ericsson A.B. (supra) follows:- "54. It is difficult to accept the aforesaid submissions in the facts of the present case. We have already held above that the assessee did not have any business connection in India. We have also held that the supply of equipment in question -was in the nature of supply of goods. Therefore, this issue is to be examined keeping in view these findings. Moreover, another finding of fact is recorded by the Tribunal that the Cellular Operator did not acquire ....
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....onstitution of India and as defined under the said Act are very wide and include all types of movable properties, whether those properties be tangible or intangible. We are in complete agreement with the observations made by this Court in Associated Cement Companies Ltd. (supra). A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, it 'Inch are susceptible to sales tax. Even intellectual property, once it is put on to a media, -whether it be in the form of books or canvas (In case of painting) or computer discs or cassettes, and marketed....
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....ual process, but once implanted in a medium are widely distributed to computer owners. An analogy can be draw n to a compact disc recording of an orchestra] rendition. The music is produced by the artistry of musicians and in itself is not a "good," but when transferred to a laser-readable disc becomes a readily merchantable commodity. Similarly, when a professor delivers a lecture, it is not a good, but, when transcribed as a book, it becomes a good. That a computer program may be copyrightable as intellectual property does not alter the fact that once in the form of a floppy disc or other medium, the program is tangible, moveable and available in the marketplace. The fact that some programs may be tailored for specific purposes need no....
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.... amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9(1 )(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. 169.Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution 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 t....