TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 91
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....see as emanating from the grounds of appeal is as under: Ground 1-The Learned AO violates the Principle of Consistency and Judicial Discipline. 1.1 The learned AO grossly erred in re-characterizing the transaction in relation to income from the sale of maintenance support and training services as Fees for Technical Services (FTS), where under the same circumstances, for AY 2016-17, the Department has allegedly assessed the same as Royalty. 1.2 This Hon'ble Tribunal in the Assessee's own case in ITA 9428/DEL/2019 has held that "Income from sale and maintenance services of software license is not Royalty in the light of the decision of the Hon'ble Supreme Court in Engineering Analysis Center of Excellenc....
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.... 3.1 The learned AO and the learned DRP have erred in concluding that the income from the rendition of services is taxable under India- Singapore Double Taxation Avoidance Agreement ('DTAA') without appreciating that the pre-condition under Article 12 to India Singapore DTAA of the services 'making available' technical know-how, knowledge, experience, etc. is not satisfied in the facts and circumstances of the present case. 3.2 The learned AO and the learned DRP ought to have appreciated that the receipt from the rendition of services is in the nature of business income, not chargeable to tax in light of Article 7 of the India Singapore DTAA. Ground 4-Without Prejudice to the above grounds, the learned AO....
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.... accordingly proposed to treat the receipts of Rs. 1,29,26,30,316/- excluding the receipts from hardware appliances, as FTS under the provisions of section 9(1)(vii) of the Act read with Explanation 2 and under Article 12 of the DTAA between Singapore and India treaty. The DRP however, excluded the receipts on account of sale of Software of Rs 41,76,62,637/- from FTS and directed the AO to consider the receipts from Maintenance support and other services (Rs 80,62,82,637/-); Education and training services ( Rs 6,86,85,219/-) totaling to Rs 87,49,67,679/- only as FTS and taxable in India @ 10% on gross basis as per section 115A of the Act r.w. Article 12 of the India- Singapore DTAA. The aggrieved assessee is before us. 6. With respect t....
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....y the 'make available' clause as per Article 12(4)(b) of the India -Singapore DTAA. 9. Per contra, the ld. DR did not raise any serious objection. The ld DR relied upon the order of the Assessing Officer/DRP. 10. We have heard the rival submissions and have perused the relevant material on record. We have carefully considered the orders of the authorities below. We find that the Maintenance support and other services as well as Education and training services are intricately and inextricably associated with the Software sold and are provided in connection with the utilization of software as per Article 5(a) of the Indo-Singapore DTAA. Further, the Revenue itself has accepted that sale of software is not taxable as Royalty. When the in....
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....on services, enhancement services, annual maintenance services and consultancy services as per the request of the Customers. 5. During the year the assessee received an amount of Rs. 5,21,17,082/- on account of software (Prime) License fee and fee for provision for other related parties of Rs. 12,01,30,877/- and receipt in nature of reimbursement o f Rs. 7,24,821/- totaling to Rs. 17,29,72,780/-. xxxxxxxxxxxxxxxx 9. However, the ld DRP held that the second set of receipts of Rs. 12,01,30,877 on account of provision of other related services, it is well settled that such services from a distinct set of receipts which need to be examined independently in terms of their taxability or otherwise under specific Article ....
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....d activities concerned with utilization and installation cannot be held to be FTS. The Ld. CIT-DR could not bring any distinguishing facts to controvert the findings of the above order of the Tribunal. Further, the Department has not brought any evidence on record to substantiate that 'make available' condition is satisfied in the case of the assessee for this assessment year. Therefore, following the decision of the Co-ordinate Bench of the Tribunal in assessee's own case, we are of the considered view that when software itself is not taxable, the 'Fees for provisions for other related services' amounting of Rs. 13,97,78,164/ will also not be taxable. Hence, the addition of Rs. 13,97,78,164/- made by the Assess....