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2019 (6) TMI 1220 - AT - Income TaxTDS u/s 195 - withhold of tax - software license fees and IT support services - as per AO same was taxable under the Income Tax Act as well as under the DTAA as Royalty - provisions of section 9(1)(vi) or Article 12 of DTAA between India and USA - HELD THAT:- Since provisions of DTAA overrides the provisions of Income Tax Act and since they were more beneficial and the definition of ‘royalty’ having not undergone any change, then the assessee was not liable to deduct tax at source out of aforesaid payments made for purchase of software. Following the same parity of reasoning, we hold that assessee was not in default and hence, there was no merit in the demand created u/s 201(1) and charging of interest u/s 201(1A) The said finding of Tribunal above in JOHN DEERE INDIA PVT. LTD. VERSUS DIT (INTERNATIONAL TAXATION) [2019 (3) TMI 458 - ITAT PUNE] would squarely apply to the facts of present case as the CIT(A) also while deciding the appeal has held that the issue raised in present appeal is squarely covered by the orders of CIT(A) in earlier years. Hence, relying on the aforesaid ratio of the Tribunal in assessee’s own case for earlier years, we cancel the demand created under section 201(1) and charging of interest under section 201(1A) of the Act in respect of payments made for purchase of software. TDS on provision of IT support charges i.e. internet charges, use of e-mail facility, backup support services, etc., which was also held to be ‘royalty’ - HELD THAT:- Payments on account of interest charges, line charges, service charges and other charges i.e. VPN charges, online meeting charges, etc. were not payment of royalty and also no technical services were made available, hence there was no requirement for deduction of tax at source. Applying the said ratio to the facts of present case, we accordingly, hold so. TDS on lease line charges - HELD THAT:- The issue arising in the present appeal on account of payment for lease line charges is identical to the issue before the Tribunal (supra) and following the same parity of reasoning, we hold that there was no requirement to deduct tax at source out of such lease line charges and hence, the assessee had not defaulted in not so deducting. TDS on payment for web based training fees - HELD THAT:- The first issue was adjudicated by Tribunal (supra) it was concluded that in the absence of any transfer of technology, the payment is not covered under the definition of ‘fees for technical services’ and hence, there was no liability upon the assessee to deduct tax at source out of payments made for web based training. Following the same parity of reasoning, we hold that assessee could not be held to be in default u/s 201(1) and 201(1A) in respect of payments made for web based training. TDS on payment against reimbursement of expats salaries - HELD THAT:- The said issue was also decided by Tribunal (Supra) and it was held that where the assessee had deducted tax at source out of salary paid to expat employees deputed in India for providing assistance to the employees of assessee, then assessee could not be held to be in default u/s 201(1) and 201(1A). Applying the same parity of reasoning, we hold that there is no merit in raising the demand u/s 201(1) and charging of interest u/s 201(1A) of the Act on this count. - appeal of assessee is allowed
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