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2021 (11) TMI 585 - AT - Income TaxIncome accrued in India - attribution of profit - PE in India - HELD THAT:- Considering the facts emanating from the orders of the first appellate authority, we are of the considered opinion that they are not at all distinguishable on the facts of Assessment Years 1997-98 and 1998-99 and since on those facts the Special Bench of this Tribunal has decided the appeal in favour of the assessee, which order has been upheld by the Hon'ble High Court of Delhi [2011 (12) TMI 91 - DELHI HIGH COURT] we are of the considered view that the property in goods have been passed outside India alongwith risks and reward. No doubt the contract in question was signed in India and the acceptance test had to be performed in India would not justify the findings of the ld. CIT(A) in light of the judgment of the Hon'ble Andhra Pradesh High Court in the case of Additional CIT Vs. Skoda Export [1986 (10) TMI 9 - ANDHRA PRADESH HIGH COURT] The ratio laid down by the Hon'ble Supreme Court in the case of Ishibkawajima-Harima Heavy Industries Ltd [2007 (1) TMI 91 - SUPREME COURT] squarely apply on the facts of the case wherein the Hon'ble Supreme Court has held that the fact that the contract was signed in India is of no material consequence since all the activities in connection with off shore supplies were carried outside India. We are therefore, of the view that the decision in the case of Ishibkawajima-Harima Heavy Industries Ltd [supra] covers the issue as to whether any part of the profit arising from supply of equipment by the assessee is chargeable to tax. We do not find any merits in the findings of the ld. CIT(A) in respect of addition sustained by him. We are of the considered view that the appellant has no business connection in India in respect of supply of GSM System by the appellant to cellular operators in India and further, there is no PE in any form in India in the captioned Assessment Years and therefore, the question of attribution of profit does not arise at all. DR has placed strong reliance on the decision of this Tribunal in the case of Huawei Technologies Co. [2020 (12) TMI 857 - ITAT DELHI] and others for Assessment Years 2009-10 to 2016-17. However, we are of the considered view that the facts of the case in hand are clearly distinguishable from the facts of that case in as much as in that case wherein at Article 6.3 it has been mentioned “Risk of loss of goods shall pass from seller to owner upon acceptance of the goods.” Whereas the facts of the case in hand show that risk and reward pass over at the Port of Sweden at the time of delivery of goods. Charging of interest u/s 234B - HELD THAT:- This issue is now no more res integra in light of the judgment of the Hon'ble Supreme Court in the case of Mitsubishi Corporation [2021 (9) TMI 875 - SUPREME COURT] as held that prior to Assessment Year 2013-14, interest cannot be charged u/s 234B of the Act.We, accordingly, direct the Assessing Officer to charge interest as per provisions of law keeping in mind the ratio laid down by the Hon'ble Supreme Court in the case of Mitsubhishi Corporation [supra]. TDS u/s 195 - payment in respect of supply of software was in nature of business income and cannot be characterized as Royalty either under the Income Tax Act or under the Indo-Sweden DTAA - HELD THAT:- This issue in now no more res integra by the judgment of the Hon'ble Supreme Court in the case of Enginering Analysis Centre of Excellence Pvt Ltd [2021 (3) TMI 138 - SUPREME COURT] 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 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 paragraph 4 of this judgment. - Decided against revenue.
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