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TMI Blog2008 (12) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... ays, airports, ports, mines, etc. Based on the market position and business potential for the said software and related products in India, a branch office of the group was established in India after obtaining necessary approval mainly for import and supply of software. Branch office also provides support services including system related services such as installation of software, interface to peripherals, uninstallation, imparting of training on the application of software etc. A return of income for the year under consideration was filed by the assessee company on 28th Nov., 2003 declaring a loss of Rs. 21,75,246. In the said return, receipts were shown by the assessee company from sale/licensing of the software. According to the AO, the said receipts having regard to the nature of services rendered by the assessee company were in the nature of royalty. He, therefore, required the assessee to show cause as to why the said receipts should not be taxed as royalty as per art. 13 of DTAA and s. 44D r/w s. 115A of the IT Act, 1961. In reply, it was submitted on behalf of the assessee company before the AO that the moment copies of software program are made and marketed, the same become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the assessee involving asst. yr. 2003-04. He also held that the assessee company in any case having not furnished any details regarding the expenses incurred in development of software in UK, the same even otherwise could not be allowed as claimed by it. 5. The AO then considered the definition of 'royalty' given in s. 9(1)(vi) of the IT Act as well as in art. 13 of the DTAA and came to the conclusion that the amount received by the assessee company from licensing of software was qualified to be royalty as per the said definitions. The reasons given by him to arrive at this conclusion were as under: "(i) The software, is licensed not sold. The copyright of the software remains with the assessee however it allows the use of copyright to the person making payment to it. As per the Indian Copyright Act, 1957 as amended in 1994 software are entitled to copyright protection. The assessee possesses copyright in the software, which it can enforce in India if any violation of such right is noticed by it. Further the Indian Copyright Act recognizes 'copyright' as doing or authorizing the doing of any of the following acts in respect of a work or any substantial part thereof namely,- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxed as business profit under art. 7 of DTAA and the expenses incurred for earning the said income were to be allowed as per the domestic law, the provisions of s. 44D as applicable to the year under consideration specifically prohibited any allowance of such expenditure. He held that the entire amount received by the assessee as royalty thus was chargeable to tax @ 20 per cent of the gross receipts as per the provisions of s. 44D r/w s. 115A. Accordingly, he brought the aggregate amount of Rs. 2,85,76,278 received by the assessee during the year under consideration to tax @ 20 per cent in the assessment completed under s. 143(3) vide an order dt. 31st Jan., 2006. 7. Against the order of the AO passed under s. 143(3), an appeal was preferred by the assessee company before the learned CIT(A) and the following submissions were made on its behalf before the learned CIT(A) while challenging the action of the AO in treating the amount in question received by it as royalty income chargeable to tax @ 20 per cent of gross receipts under s. 44D r/w s. 115A: "(a) Paper book dt. 2nd June, 2006 (i) Programmed software is 'goods'-Tata Consultancy Services vs. State of Andhra Pradesh (200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 CTR (AAR) 301 : (1997) 224 ITR 203 (AAR) misplaced because: (A) Question before Authority one of rate of tax deduction. Whether tax liability sought to be imposed or applicant was in any way discriminatory could be resolved only after assessment was made-p. 207 of the order. (B) Article 7(5) to be read in conjunction with art. 26. (C) A literal or legalistic meaning must be avoided when the basic object of the treaty might be defeated or frustrated-Dy. CIT vs. Boston Consulting Group Pte. Ltd. (D) Sec. 245S(1) says that Advance Ruling is binding on the applicant only, the concerned transaction and on IT authorities in respect of applicant. (E) Article 7(6) states that when business carried on through a PE, provisions of art. 7 (business profits) to apply. (vi) Conjoined reading of ss. 115A(5) and 115A(1)(a) suggest that in the case of royalty or fees for technical services, the assessee compulsorily, has to furnish a return of its income under s. 139(1) whether or not tax has been deducted at source. (viii) Sec. 139(1) refers to assessee's total income. (viii) Combined reading of ss. 2(24), 2(45) and 5(2) of the Act suggests the total income assessable would be such sums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of copyright of software to Indian customers. (b) that appellant had charged 'licence fee' for supply of software as evident from terms and conditions of 'licence fee' agreement. It is pertinent to mention here that nowhere under the agreement words 'sale consideration' were used. (c) that appellant had granted licence to Indian customer to use the software in lieu of the payment. (d) that appellant had also received payment in lieu of software maintenance service which included provisions of updates and user support services to customers. (e) that appellant had also received payment in lieu of training services rendered to Indian customers." 10. The learned CIT(A) then referred to the relevant provisions of Indian Copyright Act, 1957, IT Act, 1961 and the relevant DTAA. He also considered the relevant circulars issued by the CBDT in this context as well as the report of the High Powered Committee set up by the Ministry of Finance, Government of India to examine the projected overall growth in e-commerce business, the flow of technology transfer in and out of India and their position of taxation in the light of existing laws as well as the relevant DTAA. He noted that the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount paid may be correlated to the extent of the exploitation. It was also held that it is in this sense that license agreements for the exploitation of patents, inventions, etc. are being entered into in modern commercial world and as part of such agreements, even knowledge derived from his own experience and technical know-how for the most economical and efficient user of the patents, inventions, etc. are parted with by the licensor to the licensee. Payments of this kind are known as royalties within the meaning of the definition of the word "royalty" in s. 9(1)(vi), Expln. 2. 11. The learned CIT(A) finally held that keeping in view the terms and conditions of the relevant agreements, provisions of domestic law as well as DTAA and the Indian position on characterization of the software payment, the amount received by the assessee from its Indian customers under software license agreement was in the nature of royalty and the same was chargeable to tax in India as per Expln. 2 to s. 9(1)(vi). 12. The learned CIT(A) then proceeded to consider the plea of the assessee based on the revised OECD Commentary that only transfer that enables a transferee to commercially exploit soft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween India and the US and issued by India's AAR. Under this decision, which involved the case of American Express travel-related services, India's AAR asserted that foreign companies engaged in the credit card and traveller's cheque business that received payments from an Indian company for gaining access to the foreign corporation's computer system/central processing unit in the US earned royalty income which was taxable in India under the applicable treaty between India and the US. The essence of this case turned on the proper characterization of payments made to access a computer database and hardware in another country (the US) from another (India). The AAR concluded that the payment was for the 'right to use' software and therefore constituted a royalty under art. 13 of the applicable treaty. (v) Further difficulties may be encountered by the selective application of copyright principles that are inherent in the approach of the OECD and US studies discussed above. These studies are selective in their application of copyright principles since on the one hand, they seek to rely on copyright law principles by referring to the rights acquired by the transferee of computer softwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to the treaty. India has already expressly signaled its disagreement with the OECD's approach to classifying digital transactions-first, by its AAR ruling, and most recently, in the Indian electronic commerce report noted earlier. (viii) The transferee's rights will in most cases consist of partial rights or complete rights in the underlying copyright, or they may be (or be equivalent to) partial or complete rights in a copy of the program (the 'program copy'), whether or not such copy is embodied in a material medium or provided electronically. In unusual cases, the transaction may represent a transfer of 'know-how' or secret formula. (ix) Payments made for the acquisition of partial rights in the copyright (without the transferor fully alienating the copyright rights) will represent a royalty where the consideration is for granting of rights to use the program in a manner that would, without such licence, constitute an infringement of copyright. Examples of such arrangements include licences to reproduce and distribute to the public software, incorporating the copyrighted program, or to modify and publicly display the program. In these circumstances, the payments are for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yalties by various countries despite OECD recommendations. (a) Singapore imposed 15 per cent Withholding tax on all software royalties including licence fee for program copy till 31st March, 2004. The said rate has been reduced to 10 per cent w.e.f. 1st Jan., 2005. While maintaining this legal position, specific exemption from withholding tax on shrink-wrapped software has been announced. The position is the same in South Korea wherein specific exemptions from withholding tax have been announced on fulfilment of certain conditions under the Corporate IT Act of South Korea. China, Japan and New Zealand also hold the same position. (b) Australia has not only not accepted the recommendations of the OECD, rather it has gone one step further in reverse direction by enacting domestic law wherein payments made for downloading software from the internet are subjected to withholding tax. The relevant statutory provisions of the Australian IT Act are reproduced below: 'Royalty includes an amount paid as consideration for the reception of, or the right to receive, visual images or sounds transmitted to the public by satellite or cable, optic fibre or similar technology'. (xii) Practicall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about a result diametrically opposite to the GECD recommendations. The said clause is reproduced below: 9(1)(vi) Explanation 2 (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in s. 44BB; (xiv) The question, therefore arises as to whether or not the tax authorities or judicial authorities in India can modify the wording of tax treaties by including observation on OECD Commentaries by adopting a meaning differing from the wording of a tax treaty. The issue would then again be the effect of the OECD Commentaries and especially, in this case, the effect of the observation on the OECD Commentaries on previous and subsequent tax treaties of India with other countries. In this regard, it is suffice to say that, in general a State should not be required to comply with an observation made by another State or group of States or even OECD Commentary, either if the observation is prior or subsequent to conclusion of a tax treaty between both States. A State should, however, be required to implement its own observation, in accordance with the principle in tax treaty law or good faith in international agreement. India is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ftware was held to be sale by the Hon'ble Supreme Court under the relevant Sales-tax Act relying on the expanded definition of 'sale' given in the said Act. He held that the transfer of right to use goods though not sale in its traditional sense was held to be 'sale' by the Hon'ble Supreme Court relying on the expanded definition given in the relevant Sales-tax Act wherein such transfer was treated as 'deemed sale'. The learned CIT(A) then referred to the decisions of Hon'ble Supreme Court in the case of State of Uttar Pradesh vs. Union of India (2003) 130 STC 1 (SC) as well as in the case of Tamil Nadu Kalyana Mandapam Association vs. Union of India (2004) 188 CTR (SC) 297 : (2004) 267 ITR 9 (SC) and that of Hon'ble Madras High Court in the case of S.P.S. Jayam & Co. vs. Registrar, Tamil Nadu Taxation Special Tribunal (2004) 137 STC 117 (Mad) to point out that the same activity was treated differently by different laws and such legislative treatment of the same article or thing by different statutes differently had been judicially upheld as valid. He also relied on the decision of Hon'ble Supreme Court in the case of Gem Granites vs. CIT (2004) 192 CTR (SC) 481 : (2004) 271 ITR 32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... training 1986 of the Government of India. However, this exception is not applicable to the facts of this case where appellant had granted software licence to various Indian customers. 4.8.3 The characterization taxability of income from import of software has been made amply clear in the IT Act through s. 115A of the Act which specifically refers to cases where royalties are paid to non-resident for the transfer of all or any right (including the granting of the license) in respect of any computer software to a person resident in India. 4.8.4 A copy of software supplied by the appellant did not amount to a sale but it is a licence to use the software. This is because software is an intellectual property right (IPR) which can be licensed to one user and can be given further to any number of user. In other words the IPR in software still remain intact with the supplier. Thus effectively the consideration paid is only for license use. It is pertinent to mention here that the Finance Act, 2004 has inserted Category No. 55B to include 'intellectual property services' to mean '(a) transferring whether permanent or otherwise or (b) permitting use or enjoyment of any intellectual prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... branch office mainly for import and supply of software developed by its parent company for its application in civil engineering ind11stries. He submitted that the activities of the assessee company thus are to import the software exclusively from its parent company and standardizing it to make the same India specific wherever the customers so demand. He submitted that the software is allowed to be used by the Indian customers under a license agreement and the amount received for allowing such use by the assessee company has been held to be its royalty income by the authorities below relying on the provisions of s. 9(1)(vi) of the IT Act as well as art. 13 of the DTAA between India and UK. Referring to cl. (v) of Expln. 2 to s. 9(1)(vi), he submitted that consideration for the transfer of all or any rights (including the granting of a license), inter alia, in respect of any copyright is treated as royalty income. He contended that transfer of rights in respect of copyright thus is envisaged and unless the transferee does not acquire and enjoy the same rights as that of the transferor, it cannot be said that there was any such transfer as envisaged in cl. (v) of Expln. 2 to s. 9(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... US models is to characterize the computer software payments as business profits rather than royalties and the same needs to be adopted in the present case also. As regards the reliance of the learned CIT(A) on the Commentary of Klaus Vogel on Double Taxation Convention, he contended that the opinions expressed in the commentary do not have the force of law. He submitted that software can be licensed to one user and can be given further to any number of users. According to him, the intellectual property rights (IPR) in the software thus still remains intact with the supplier and the consideration is received only for allowing licensed use. 20. As regards the decision of Hon'ble Supreme Court in the case of Tata Consultancy Services relied upon by the assessee, the learned counsel for the assessee submitted that the learned CIT(A) has distinguished the same on the ground that the transfer of software program was held to be a sale by the Hon'ble Supreme Court relying on the extended definition given in the relevant sales-tax law. He contended that the computer software, however, has been held to be goods by the Hon'ble Supreme Court even relying on Art. 366(12) of the Constitution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a well-settled position that the provisions of DTAA override the provisions of the IT Act and if it is found that the payment for software cannot be in the nature or royalty as per art. 13 of DTAA. s. 9(1)(i) of the IT Act cannot be invoked at all to treat such payment as royalty. He then took us through the decision of the Special Bench of Tribunal in the case of Motorola Inc. and specifically invited our attention to the following observations recorded by the Tribunal in the said decision: "(i) The crux of the issue is whether the payment is for a copyright or for a copyrighted article. If it is for copyright, it should be classified as royalty both under the IT Act and under the DTAA and it would be taxable in the hands of the assessee on that basis. If the payment is really for a copyrighted article, then it only represents the purchase price of the article and, therefore, cannot be considered as royalty either under the Act or under the DTAA. (ii) Only the owner of the computer programme has the right to sell or give on commercial rental or offer for sale or for commercial rental any copy of the computer programme. (iii) If it were a copyright, then the holder of the cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks and records are copyrighted articles and if they are sold, the user does not obtain the right to use any significant rights in the underlying copyright itself, which is what should determine the characterization of the revenue as sale proceeds rather than royalties." 23. The learned counsel for the assessee contended that the payment for software thus is for a copyrighted article and not the copyright right as held by the Special Bench of Tribunal in the case of Motorola Inc. and the same, therefore, is in the nature of commercial income rather than royalties. He contended that where the price is paid for acquiring the ownership of the article itself, it cannot be termed as royalty as held by the Special Bench of Tribunal. He submitted that a detailed order has been passed by the Special Bench of Tribunal in the case of Motorola Inc. where every aspect of "royalty" and "copyright" vis-a-vis sale of software has been gone into. He contended that the learned CIT(A), however, has chosen to distinguish the said case on the basis that the assessee in the present case did not supply any integrated equipment consisting of hardware and software as was the factual position in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he end users. There was thus no transfer of intellectual property right in the transaction and the license in question was a "non-exclusive restricted license" which granted only a limited right to use the software by creating a bar on the software being used in the public domain or for the purpose of commercial exploitation. He also pointed out that under the license, there were restrictions regarding making copies, sub-licensing and alienating. He contended that the transaction thus was one of transfer of copyrighted article and no copyrights got transferred to the end users. He submitted that in general, intellectual property is protected by giving the creator of a work or an inventor exclusive rights to commercially exploit his creation or invention for a limited period of time. He submitted that as clearly mentioned in the Mashelkar Committee Report, copyright in the computed programs such as software is to be protected by way of protection of source of object codes which actually constitutes intellectual creations. He contended that the copyright of the software in the present case thus had remained with the assessee and even the learned CIT(A) has not been able to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the case of Tata Consultancy Services, the transfer of software was held to be a sale by the Hon'ble Supreme Court for the purpose of levy of sales-tax relying on the extended definition of 'sale' given in the relevant sales-tax law wherein the said transfer was treated as a deemed sale. Relying on the decision of Hon'ble Bombay High Court in the case of CWT vs. State Bank of India (1995) 125 CTR (Bom) 461 : (1995) 213 ITR 1 (Bom) at p. 89, he contended that a definition of a similar expression as given in other statute cannot always be relied upon for the purpose of interpreting a similar expression used in a different statute. 28. The learned Departmental Representative also pointed out the distinction between the lease transactions and sale transactions and pointed out in this regard that in order to constitute a sale, the parties must intend to transfer the ownership of the property. As regards the reliance placed by the learned counsel for the assessee on the provisions of Copyright Act, 1957, he contended that the learned counsel for the assessee has tried to interpret the said provisions by referring the transactions as sale of copyrighted articles and not the copyr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licensed version of computer software was nothing but license fees covered under the term "royalty" and not "business income" from sale of goods, articles or things. He, therefore, strongly supported the impugned order of the learned CIT(A) on this issue and urged that the same may be upheld. 30. We have considered the rival submissions and also perused the relevant material on record. We have also carefully gone through the various judicial pronouncements cited by the learned representatives of both the sides as well as relied upon by the learned CIT(A) in his impugned order. The main issue which is required to be considered and decided by us in the present context is whether the payment received by the assessee under the license agreement for allowing use of the software is in the nature of royalty income or it constitutes the business profit of the assessee. The issue as to whether the same is in the nature of royalty is required to be decided in the light of Expln. 2 to s. 9(1)(vi) of the IT Act, 1961 as well as art. 13(6) of the relevant DTAA. The expression "royalty" has been defined in Expln. 2 to s. 9(1)(vi) as under: "Explanation 2: For the purposes of this clause, 'roya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inc. if it is for a copyright, it should be classified as royalty both under the IT Act and under the DTAA On the other hand, if the payment is actually for a copyrighted article, then it only represents the purchase price of the article and the same, therefore, cannot be considered as royalty either under the IT Act or under the DTAA, 32. A perusal of the decision rendered by the Special Bench of Tribunal in the case of Motorola Inc. cited by the learned counsel for the assessee shows that an identical issue was involved before the Special Bench in that case and while addressing the same, it was considered by the Tribunal from all the relevant angles. First of all, a reference was to the definition of "copyright" as given in s. 14 of the Copyright Act, 1957 wherein it was defined as the exclusive right to do or authorize the doing of any of the following acts in respect of a work or any substantial part thereof viz.: "(a) in the case of a literary, dramatic or musical work, not being a computer programme, (i) to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have any of such rights as mentioned in cls. (a) and (b) of s. 14, it would mean that they do not have any right in the copyright and in such a case, the payment made to them could not be characterized as royalty either under the IT Act or under the DTAA. 34. The Special Bench of the Tribunal then proceeded to examine from the relevant license agreement as to whether any of the licensees was allowed to exercise any such rights mentioned in the relevant provisions with reference to the software provided by the assessee. On such examination, it was noted by the Tribunal from the relevant clause of the agreement that the licensee was granted a non-exclusive restricted license to use the software but only for its own operation and not otherwise. The licensee thus was permitted to use the software for the purpose of its own operation and there was a clear bar on the software being used by the licensee in the public domain or for the purpose of commercial exploitations. The grant of a non-exclusive restricted license to use the software again meant that the supplier of the software could supply similar software to any number of persons to which the licensee could have no objection. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that the transfer of the ownership of a physical thing in which copyright exists gives the purchaser the right to do with it in physical form whatever he pleases except the right to make copies and issue them to the public. Relying on the said observation, the contention raised on behalf of the Revenue that if a person owns a copyright article, then he automatically has a right over the copyright also was found to be not acceptable by the Tribunal. It was observed by the Tribunal in this context that even though one cannot have the copyright right without a copyrighted article, it does not follow that one having the copyrighted article has also the copyright in it. 37. The Tribunal then referred to para 14 of the Commentary on OECD Model Convention (dt. 28th Jan., 2003) which reads as under: "14. Commentary on art. 12-Paper book V-In other types of transactions, the rights acquired in relation to the copyright are limited to those necessary to enable the user to operate the programme for example, where the transferee is granted limited rights to reproduce the programme. This would be the common situation in transactions for the acquisition of a programme copy. The rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the copyrighted computer programme. (iii) The right to make a public performance of the computer programme. (iv) The right to publicly display the computer programme." 39. The Tribunal also referred to the Commentary of "Charl P.du TOIT" on this issue wherein it was opined that articles such as books and records are copyrighted articles and if they are sold, the user does not obtain the right to use any significant rights in the underlying copyrights itself which is what should determine the characterization of the Revenue as sale proceeds rather than royalties. The Tribunal thus held that the payment by the transferee was not for any copyright in the software but the same was only for the software as such as the copyrighted article and the payment for such transfer, therefore, could not be considered as royalty within the meaning of Expln. 2 below s. 9(1)(vi) of the IT Act or art. 13.3 of the relevant DTAA. 40. It is observed that the material facts involved in the present case relevant to the issue under consideration arc similar to the facts involved in the case of Motorola Inc. inasmuch as the relevant clauses of the concerned agreements as referred to by the Special Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im on the basis that the assessee in that case had purchased an integrated electronic switching system consisting of both hardware as well as software whereas the assessee in the present case has licensed only the software to Indian customers without there being any sale of integrated hardware. The decision of the Special Bench in the case of Motorola Inc. on this issue as discussed by us in the foregoing portion of this order, however, shows that this aspect of the matter was not at all taken as basis by the Tribunal to come to the conclusion as it ultimately did. There is nothing whatsoever in the order of the Special Bench to indicate or even suggest that this was in any way the material aspect on the basis of which the Tribunal had proceeded or had rendered its decision. We also fail to understand how this aspect of the matter is so material to distinguish the well-considered and well-discussed decision of the Special Bench rendered after taking into consideration all the relevant aspects. Even the impugned order of the learned CIT(A) does not throw any light on the issue as to how this difference in factual position was so material to justify his action in not following the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. was to be treated as royalty. The contention raised by the Revenue in this regard before the Tribunal was that under the license agreement, the developer of the software had licensed its intellectual property in the software in favour of the licensee. The learned CIT(A) has also adopted a similar basis in his impugned order in support of his decision. The contention raised on behalf of the Revenue was also that although a limited right to use of the software was transferred in favour of the assessee, it was still covered within the definition of royalty. In this context, the Tribunal referred to the relevant provisions of the license agreement as well as the decision of Hon'ble Supreme Court in the case of Tata Consultancy Services and came to the conclusion that the incorporeal right to software i.e., copyright had remained with the owner and the same was not transferred to the assessee. It was also held by the Tribunal that right to use of a copyright is totally different from right to use the program embedded in a cassette or a CD which may be a software and the payment made for the same could not be said to be received as consideration for the use of or right to use any co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, the software provided by the assessee was basically a standard software and as pointed out by the learned counsel for the assessee, customization of the same was done to the limited extent as per the specific requirement of the customers. Such limited customization thus was not going to bring any material change in the nature of software or even in the nature of license granted by the assessee. The learned CIT(A), therefore, was not correct in distinguishing the case of Samsung Electronics Co. Ltd. decided by the Tribunal involving a similar issue on the basis as he did and in our opinion, the said decision of the Tribunal being directly applicable to the facts of the present case should have been followed by the learned CIT(A) being a binding precedent. 44. Having held that the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Motorola Inc. decided by Special Bench of the Tribunal as well as that of the case of Samsung Electronics Co. Ltd. decided by the Co-ordinate Bench of this Tribunal, it follows that we have to follow the decisions of the Tribunal rendered in these cases and decide the issue in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee before him was distinguished by him on the ground that the same was rendered in the context of Sales-tax Act and the software was held to be goods liable to sales-tax relying on the extended definition of "goods" as given in the Sales-tax Act. According to the learned CIT(A), when different statutes by different phraseology treat the same transaction differently, the attempt at importing the meaning assigned in one statute into a different statute is prohibited. For this proposition, he also relied on the decisions of Hon'ble Supreme Court in the cases of Gem Granites and Gramophone Co. of India Ltd. He, however, overlooked that in the case of Tata Consultancy Services , Hon'ble Supreme Court had not only considered the issue from the angle of whether the software was goods for the purpose of Andhra Pradesh Sales-tax Act but the computer software was held 10 be goods by the Hon'ble apex Court even under Art. 366(12) of the Constitution of India. As held by the Hon'ble Supreme Court in this context, the term "goods" as used in Art. 366(12) of the Constitution of India is very wide and includes all types of movable properties, whether those properties be tan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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