TMI Blog2021 (6) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... are - HELD THAT:- Respectfully following the above view in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT ] we hold that purchase of software in the present facts does not amount to give rise to any taxable income in India as a result of which provisions of sec. 195 of the Act are not attracted. The assessee does not have any obligation to deduct tax at source. Therefore, provisions of sec. 9(1)(vi) along with Explanation 2 is not applicable to present assessee's. - IT(TP)A Nos. 1758/Bang/2013, 294/Bang/2014, 489/Bang/2016 and 191/Bang/2017 - - - Dated:- 14-6-2021 - Chandra Poojari, Member (A) And Beena Pillai, Member (J) For the Appellant : T. Suryanarayana, Advocate For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- (2.1.16) The assessee has not been able to prove so before this panel too and hence, we reject this ground of the assessee as well. This ground is similar to the grounds taken before the earlier DRP panels as well and we find no reason to take a different stand in the assessees case. These grounds are accordingly rejected. However, we are of the considered view that as the receipts are taxed With reference to actual remittances as per the provisions of the DTAA, and as there is no explicit restriction in the DTAA that the remittances ought to made within the same financial year, we do not find any justification in the AO's action in adopting differential rates of taxation for the remittances made in the same year and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 219,658,486; and c) Raising a demand of ₹ 16,969,420 upon the Appellant. 3 Erroneous treatment of the consideration received for sale of software as 'royalty' 3.1 The AO and the Dispute Resolution Panel ('DRP') have erred in not holding that consideration received by the Appellant would not qualify as 'royalty' under Article 12 of the Double Taxation Avoidance Agreement between India and Singapore ('the DTAA') and under the provisions of the Act. 3.2 The AO and the DRP have erred in not holding that the definition of royalty' under the DTAA has not undergone any change despite of the retrospective amendment made vide Finance Act, 2012, to section 9(1)(vi) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents received for the sale of software could not be construed as royalty'. 3.10 The AO and the DRP have erred in not following certain decisions rendered by the Delhi High Court, the Authority for Advance Ruling and various benches of the Tribunal. 4 Erroneous treatment of the consideration received for sale of hardware as 'royalty' The AO and the DRP have erred in law in treating the consideration received by the Appellant from Indian distributors/customers for sale of hardware as 'royalty' income taxable in India. 5. Erroneous conclusion on applicability of Article 24 of the DTAA 5.1 The AO and the DRP have erred in concluding that the provisions of Article 24 of the DTAA are applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We note that Hon'ble Supreme Court considered the issue by observing as under:- 3. One group of appeals arises from a common judgment of the High Court of Karnataka dated 15.10.2011 reported as CIT v. Samsung Electronics Co. Ltd., (2012) 345 ITR 494, by which the question which was posed before the High Court, was answered stating that the amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers, amounted to royalty and as this was so, the same constituted taxable income deemed to accrue in India under section 9(1)(vi) of the Income Tax Act, 1961 [ Income Tax Act ], thereby making it incumbent upon all such persons to deduct tax at source and pay such tax deductible at source ['I'D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the income Ta Act (section 9(1)(vi, along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. 169. Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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