TaxTMI 
TaxTMI 
2022 (8) TMI 677
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....treated as Royalty, when the same is also part of sale of software which is covered under the definition of Royally u/s 9(l)(vi) of the IT Act and DTAA between India and Singapore. Moreover, the case of M/s Infrasoft Limited referred by the assessee during the appeal is pending for adjudication before Hon'ble Supreme Court." 3. The assessee has taken the following grounds:- "Ground 1 - Consideration from sale of software licenses of Rs. 2,79,11,40,041 taxed as royalty In the facts and circumstances of the case and in law, the learned AO and the Hon'ble CIT(A) erred in assessing the receipt on sale of software licenses as consideration for use of 'process' and/or 'for information concerning industrial, commercial or scientific experience' and as a result erred in treating the said consideration taxable as 'Royalty' in accordance with the provisions of the clause (ii) of the Explanation 2 to section 9(l)(vi) of the Income Tax Act, 1961 and Article 12 of the DTAA between India and Singapore. The CIT(A) ought to have appreciated that * Software sold by the Appellant provides a facility by using which, the purchasers can keep their computer systems secure and it is different fr....
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.... filed its submissions vide letter dated 01.11.2017. The Ld. AO passed draft assessment order on 10.11.2017 which was received by the assessee on 14.11.2017. Since the assessee neither filed its objection before Hon'ble DRP nor submitted its acceptance to the variations made to the returned income, the Ld. AO completed the assessment on 18.01.2018 under section 143(3) r.w. section 144(C)(3)(b) of the Income Tax Act, 1961 (the "Act") holding that the receipt of Rs. 2,79,11,40,041/- claimed as sale of software is nothing but royalty with respect to the use of the computer software by the end users together with or without technical support taxable under section 9(1)(vi) of the Act as well as DTAA and is, therefore, brought to tax as 'royalty' taxable @ 10% under the India-Singapore DTAA which is more beneficial to the assessee. 5. Aggrieved, the assessee filed appeal before the Ld. CIT(A) who recorded the finding in his concluding para 5.8 of his order as under:- "5.8 In view of the aforesaid finding it is seen that the receipts for providing business security intelligence applications to the clients is clearly classifiable as royalty. Receipts from supports, services which are in....
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....consideration is now squarely covered by the decision of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence (P) Ltd. vs. CIT (2021) 432 ITR 471 (SC). The Ld. AR pointed out that identical issue came up for consideration before the Tribunal in assessee's own case for AY 2013-14 and 2014-15 and the Tribunal decided in favour of the assessee. 7.3 The Ld. AR further submitted that in AY 2018-19 the Ld. AO vide his order dated 29.03.2022 (copy at page 139-140 of Paper Book) assessed the income of the assessee at Nil. The assessment for AY 2019-20 has also been completed by the Ld. AO on 29.09.2021 (copy at page 142-156 of Paper Book) accepting the income returned by the assessee at Nil relying on the decisions (supra) of the Tribunal and the decisions of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence (P) Ltd. vs. CIT (2021) 432 ITR 471 (SC). 8. We have considered the rival submissions and perused the orders of Ld. AO/CIT(A) as also the material on records. It is observed that the issue whether the consideration from sale of software license received by the assessee is 'royalty' or not in terms of section 9(1)(vi) of the Act and/or Article 12....
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....me issue has been considered in assessee's own case for AY 2014-15 by the Tribunal in its order dated 15.04.2021 in ITA No. 3013/Del/2017 and the Tribunal in para 7 of its order observed that the issue stands settled by the Hon'ble Apex Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. vs. CIT since reported in (2021) 432 ITR 471 (SC) wherein the Tribunal quoted para 168,169 and 170 of the decision (supra) of the Hon'ble Supreme Court: "168. Given the definition of royalties contained in article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear that there is no obligation on the persons mentioned in section 195 of the Income-tax Act 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/end- users, 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 a....