TaxTMI 
TaxTMI 
2023 (10) TMI 836
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....riation in figures. Therefore, for ease of reference, we reproduce the grounds raised in ITA No. 1282/Del/2022 hereunder: "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 A.O. amounting to Rs. 94,21,081/- received by assessee company as receipts from Technical services are taxable as Fees for Technical Services u/s 9(1)(vii) of the Income Tax Act, 1961. 2. Whether on facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in holding that receipts of the assessee from sale of software is not taxable as royalty." 3. Briefly, the facts are, the assessee is a non-resident corporate entity and a tax resident of Singapore. A....
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.... income under section 9(1)(vi) of the Act and Article 12(3) of India-Singapore Double Taxation Avoidance Agreement (DTAA). Further, the amount received by the assessee towards rendering certain services was treated by the Assessing Officer as fee for technical services (FTS) under section 9(1)(vii) of the Act. He also held that since the services rendered are ancillary and subsidiary to the application or enjoyment of the right, property or information, which resulted in payment of royalty, the fee received is to be treated as FTS even under Article 12(4) of India-Singapore DTAA. Accordingly, he also brought to tax the service charges received by the assessee on gross basis by applying the rate of 10%. 4. The assessee contested the aforesa....
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....terisation of service charges received as FTS under section 9(1)(vii) of the Act and Article 12(4) of India- Singpore DTAA, learned Commissioner (Appeals) observed, once it is held that the receipts from sale of hardware and software packages are not in the nature of royalty, the service charges cannot be considered to be ancillary and subsidiary to payment of royalty, hence, would not fall under Article 12(4)(a) of the Treaty. Proceeding further, he held that since, while rendering services, the assessee had not made available the knowledge, skill or knowhow etc., it will not fall as FTS under Article 12(4)(b) of the Treaty as well. Further, he held that since the fees received are not towards services consisting of development or transfer....
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....No. 1288/Del/2015 and 4173/Del/2016 had passed an order on 18.11.2019, wherein, after taking note of the fact that the assessee is merely a distributor of software and hardware products after procuring the same from other vendors/manufacturers, the Tribunal had directed the Assessing Officer to verify whether there is any component of royalty involved in such transactions. Pertinently, while re-examining the issue in pursuance to the directions of the Tribunal in the assessment years 2011-12 and 2012-13, the Assessing Officer has concluded that the receipts from sale of hardware and software packages are not in the nature of royalty. This is very much evident from the assessment orders dated 26.11.2021 passed in the assessment years 2011-12....