TaxTMI 
TaxTMI 
2021 (9) TMI 1337
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....Appeals)-42, New Delhi, each dated 27.06.2017 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....
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....object to the above arguments of the learned counsel. 5. We have heard both the 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 v....
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....at the ITAT had relied upon ruling of this Court in Director of Income Tax V Ericsson A.B. (2012) 3 ITR 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 finding....
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....sion in this behalf is required to be noted:- "In our view the term "goods" as used in Article S66(12) of the Constitution 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 o....
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....) which are moveable at the time of the identification for sale". It was held: "Computer programs are the product of an intellectual 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 mediu....
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.... to deduct tax at source, as the distribution agreements'/EULAs in the facts of these cases do not create any interest or right in such distributors/endusers, which would 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 pa....