2025 (10) TMI 772

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....e appellants-Revenue, and Smt. Manasa Ananthan, learned counsel for the respondent-assessee. 2. These appeals by the Revenue are directed against the common order dated 23.08.2021 passed in ITA Nos. 3229/Bang/2018, pertaining to the assessment year 2014-15, by the Income Tax Appellate Tribunal "C" Bench, Bengaluru (for short, 'the Tribunal'). 4. The Revenue has raised the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in by holding that the payment made to non-resident entities in respect of purchase of software was not royalty and that the same did not give rise to income taxable in India and therefore, the petitioners were ....

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....nding for adjudication before Supreme Court in case Engineering Analysis Centre of Excellence (reported in 432 ITR page 471)? 5. The respondent-assessee is a foreign company engaged in the business of marketing and servicing data processing equipment. The assessee filed returns of income for the assessment year 2014-15. During the course of scrutiny, the Assessing Officer held that the assessee had transferred copyrighted software for the purpose of making further sales, and accordingly held that the income was taxable as royalty under Section 9(1)(vi) of the Income-tax Act, 1961 (for short, 'the Act'). The assessee, however, contended that what was sold was a copyrighted article and not the copyright itself. The Assessing Officer reject....

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....ther submits that the Revenue has preferred a review petition before the Hon'ble Supreme Court seeking review of the judgment in Engineering Analysis. It is therefore prayed that the hearing of these appeals be deferred pending adjudication of the said review petition. 8. On the other hand, Smt. Manasa Ananthan, learned counsel for the respondent-assessee, submits that the substantial questions of law raised in these appeals are no longer res integra in view of the law laid down by the Hon'ble Supreme Court in Engineering Analysis. It is submitted that what is sold is a copyrighted article and not the copyright itself, and therefore, the consideration received on the sale of software does not constitute 'royalty' under Section 9(1)(vi) o....

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....cial Leave Petition (Civil) Diary No.24154/2024 by order dated 26.07.2024, while dismissing the special leave petition. It is, therefore, submitted that deferment of the hearing of this appeal is not warranted in view of the dismissal of the review petition in the case of IBM India (payer). 9. We have given our thoughtful consideration to the submissions of learned counsel for the parties and perused the appeal papers. 10. The facts that emerge from the record are that the respondent-assessee has sold copyrighted software and received consideration therefor. The assessee is a foreign company, and the Double Taxation Avoidance Agreement is attracted in the case. The Revenue contends that the income from the sale of software is taxable ....