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2017 (10) TMI 1472 - AT - Income TaxTDS u/s 195 - import of Software Licenses - AO treated the same as royalty payments in terms of sec. 9(1 )(iv) - overriding provisions of DTAA - HELD THAT - There is no dispute that the present issue is covered against the assessee by the judgment of CIT vs. Samsung Electronics Co. Ltd. 2011 (10) TMI 195 - KARNATAKA HIGH COURT and assessee has merely cited these two judgments rendered in the case of WIPRO Ltd. . 2010 (8) TMI 1053 - KARNATAKA HIGH COURT and 2015 (10) TMI 826 - KARNATAKA HIGH COURT and no other argument was made to the effect that this issue is not covered against the assessee by this judgment of Hon ble Karnataka High Court rendered in the case of CIT vs. Samsung Electronics Co. Ltd. (Supra). Since these two judgments cited by him are not applicable as per above discussion; we respectfully follow the judgment of Hon ble Karnataka High Court rendered in the case of CIT vs. Samsung Electronics Co. Ltd. (Supra) and decline to interfere in the order of CIT (A). - Decided against assessee.
Issues involved:
1. Jurisdiction of Assessing Officer and CIT (A) in passing the order. 2. Treatment of payments for software licenses as royalty payments under sec. 9(1)(iv) and non-deduction of tax at source. 3. Calculation of tax and interest on the payments made by the appellant. 4. Consideration of Double Taxation Avoidance Agreements. 5. Applicability of case laws and judicial precedents to the facts of the case. Jurisdiction of Assessing Officer and CIT (A): The appellant contended that the Assessing Officer and CIT (A) erred in passing the order without jurisdiction, leading to it being bad in law. The appellant argued that the conclusions drawn were erroneous and not tenable in law. The tribunal examined the grounds raised and considered the submissions made by both parties. The tribunal found that the judgment of Hon'ble Karnataka High Court in a similar case favored the revenue, and since no other argument was presented to counter this, the tribunal declined to interfere in the order of CIT (A). Treatment of payments for software licenses and tax deduction: The Assessing Officer treated the appellant as an assessee in default for not deducting tax at source on payments made for software licenses, considering them as royalty payments under sec. 9(1)(iv). The appellant argued against this treatment, stating that there was no liability to deduct tax at source. The tribunal analyzed previous judgments of the Hon'ble Karnataka High Court related to similar issues. The tribunal found that the earlier judgments cited by the appellant were not relevant to the present case, and the judgment in favor of the revenue in the case of CIT vs. Samsung Electronics Co. Ltd. was applicable. Consequently, the tribunal dismissed the appeal filed by the assessee. Calculation of tax and interest: The Assessing Officer calculated tax at 10% on the payments and levied interest under sec. 201(1)(A) of the Act. The tribunal examined the facts and circumstances of the case and concluded that there was no liability to deduct tax at source on the payments made by the appellant. Therefore, the levy of tax and interest was deemed bad in law and was deleted. Consideration of Double Taxation Avoidance Agreements: The appellant argued that the authorities below had erred in not considering the provisions of Double Taxation Avoidance Agreements properly. The tribunal did not provide a detailed analysis of this issue in the judgment. Applicability of case laws and judicial precedents: The appellant contended that the case laws and judicial precedents relied upon by the authorities below were not applicable to the facts of the case. The tribunal examined the judgments of the Hon'ble Karnataka High Court in the cases of WIPRO Ltd. vs. DCIT and CIT vs. Samsung Electronics Co. Ltd. The tribunal found that the judgments cited by the appellant were not relevant to the present case, and the judgment in favor of the revenue was followed. As a result, the appeal filed by the assessee was dismissed. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the tribunal's decision on each issue.
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