2014 (5) TMI 1248

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....arising on account of 'Royalty and fees for Technical Services' is taxable on receipt basis and not on accrual basis as held by the assessing officer in the assessment order." 3. The assessee in the present case is a company which is the tax resident Federal Republic of Germany. It derived income by way of royalty and fees for technical services under various agreements/contracts entered into with different companies in India. The return of income for the year under consideration was filed by it on 31-10-2005 showing total income of Rs. 28,82,12,290/-. In the said return, income from royalty and fees for technical services was offered by the assessee to tax on receipt basis as done consistently in the earlier years. Although, it was....

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....f the assessee on this issue was accepted by the Tribunal keeping in view para No. 1 to 3 of Article VIII-A of the DTAA between India and Federal Republic of Germany which clearly provided for assessment of royalty and fees for technical services only on receipt basis and not otherwise. This decision of the Tribunal has been subsequently upheld by the Hon'ble Bombay High Court consistently up to assessment year 2003-04 after taking note of para No. 1 to 3 of Article VIII-A of the relevant DTAA which specifically provided that the assessment of royalty or any other fees for technical services should be made in the year in which the amounts are actually received and not otherwise. Respectfully following the decision of the Tribunal ....

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....for the earlier years i.e. 2001-02 & 2002- 03. He also took note of the fact that a similar issue was decided by his predecessor in favour of the assessee in assessment years 2003-04 & 2004- 05. 7. We have heard the arguments of both the sides and also perused the relevant material placed on record. The ld. Representatives of both the sides have agreed that this issue involved in ground No. 2 of the Revenue's appeal is squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case for earlier years. The copies of the relevant orders of the Tribunal are placed on record before us and a perusal of the same shows that the similar issue was decided by the Tribunal in favour of the assessee in assessmen....

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.... from the supply of equipment and hence that portion cannot be considered as "royalty". We, therefore, approve the view taken by the learned CIT (A) on this issue." 8. It is also noted that the above decision rendered by the Tribunal in A.Y. 2001-02 has been subsequently followed by the Tribunal in assessment years 2002-03, 2003-04 & 2004-05 to decide a similar issue in favour of the assessee. As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to A.Y. 2001-02 to 2004-05, we respectfully follow the decision of the Tribunal rendered in the said years and uphold the impugned order of the ld. CIT (A) holding that the value of software supplied by the assessee could not be trea....