2009 (2) TMI 24

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....l, 2005. The applicant had acquired an exclusive license to reproduce Microsoft products and distribute them in America region. Pursuant to a plan of merger, Gracemac Corporation ("Gracemac"), a wholly owned subsidiary company of MS Corp. merged with the applicant on 2nd October, 2006. MS Corporation had granted Gracemac exclusive license to manufacture and distribute Microsoft products and also license a third party to directly grant the customers the right to reproduce Microsoft software products for internal use. Following the merger of Gracemac with the applicant, the exclusive license belonging to Gracemac was assigned in favour of the applicant. Thereafter, the applicant has entered into a license Agreement with Microsoft Operations P....

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....MRSC irrespective of whether it is able to sell the products to the re-seller/consumers or not. The software products are used by the end-user subject to the End-user license. 2. These facts are stated in the application. The applicant formulated four questions which can be reduced to two. (i) Whether payments received by Applicant from M.O Singapore for functions performed in Singapore under the license agreement granting manufacturing and distribution rights to MO are in the nature of 'royalty income' sourced and arising in India and taxable in India under the provisions of section 9(1)(vi) of the Income-tax Act, 1961 or under the provisions of DTAA between India and USA? (ii) Whether under the arrangement (details outlined in An....

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....i) is already pending before any income-tax authority or Appellate Tribunal [except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N] or any court; 5. On behalf of the Revenue it is submitted that the same questions are pending determination in the appeals filed by Gracemac which is the entity that merged with the applicant. It is pointed out that the same agreements and the same questions were considered by the Appellate Commissioner who by an order dated 12.2.2008 dismissed the appeals filed by Gracemac. Further appeals to ITAT filed by Gracemac for various asst. years are pending before the Delhi Bench of the Tribunal. 6. It is not in dispute that the same questions raised in this applic....