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2017 (10) TMI 55 - AT - Income TaxTaxability in India - existence of a business connection - P.E. in India - taxability of the income from installation, commissioning and testing activities as well as any function performed by expatriate employees of the group companies seconded to Nortel India - Held that:- Assessing Officer placed reliance on the findings of the earlier Assessment Years in the assessment orders for the assessment years under consideration in these appeals. The issue is no longer Res Integra, and stands squarely covered in favour of the Assessee, and since the High Court had held that no taxability arose under the provisions of Section 9 itself, the issue of existence of permanent establishment becomes academic. We, therefore, while respectfully following the decision of the Hon’ble Jurisdictional High Court in assessee’s own case reported in (2016 (5) TMI 373 - DELHI HIGH COURT) answer the grounds in the appeals preferred by the assessee accordingly in favour of the assessee. Taxation of Software - Held that:- We find ourselves in agreement with the submission made on behalf of the assessee that the embedded software is not royalty and the receipts on account of sale of embedded software cannot be separately brought to tax. Levy of interest under section 234B - Held that:- In view of the finding of the Hon’ble High Court in assessee’s own case reported in (2016 (5) TMI 373 - DELHI HIGH COURT) that no portion of the profits from off shore supplies was taxable in India, levy of interest becomes academic given the absence of any taxable income in India. Non-taxability under the provisions of Domestic Law itself - Held that:- Having regard to the facts and circumstances of the case in the light of the fact that for the earlier assessment years a specific finding was given by the High Court as to the non-taxability of the Assessee under the provisions of the Income Tax Act and the revenue had filed a Special Leave Petition before the Hon’ble Supreme Court which stood admitted involving similar questions, the questions relating to the limiting of benefits is only academic and does not required to be adjudicated specifically. We, therefore, find that the cross objections preferred by the Revenue are liable to be dismissed.
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