2026 (5) TMI 1282

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lant has invited the Court's attention towards the relevant part of the assessment order dated 27.06.2022, whereby the Assessing Officer (AO) has made additions on following grounds:- (i) Sale of hardware appliances. (ii) Sale of software licenses. (iii) Maintenance support and other services related to software licenses. (iv) Education and training services. 2. He submitted that ignoring the fact that the additions were made on four counts, the Income Tax Appellate Tribunal, Delhi 'D' Bench (ITAT) (hereinafter referred to as 'the Tribunal') has allowed the respondent-assessee's appeal, as if the issue involved in the present case was only that of sale of software licenses. 3. Learned counsel for th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....urther submitted by Mr. Tarun Gulati, learned Senior Counsel that in the subsequent years i.e., Assessment Year (AY) 2020-21 onwards, the AO has accepted the correct legal position and has not made any addition on either of the remaining two counts, i.e., Sale of hardware appliances or Sale of software licenses. 8. Heard learned counsel for the parties. 9. A look at the impugned order of the Tribunal shows that the Tribunal has allowed respondent-assessee's appeal, relying upon the judgment of Hon'ble the Supreme Court in Engineering Analysis (supra), which essentially deals with sale of software as "royalty". The relevant observations rendered in Engineering Analysis (supra) are reproduced hereinfra:- "179. The Revenue, ther....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 of the Income Tax Act. The answer to this question will apply to all four categories of cases enumerated by us in para 3 of this judgment." 10. The remaining two issues i.e., Maintenance support and other services related to software license and Education and training services, despite being involved in the appeal before the Tribunal but have no....