TMI Blog2010 (6) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Rs. 16,72,61,927 received by the assessee company was on account of sale of copyright article and does not amount to royalty within the meaning of article 12(3) of the DTAA between India and USA. 3. The facts which reveal from the records are that the assessee company is incorporated in USA and also a tax resident of USA. The assessee markets and sells Alcatel products to customers outside USA. The assessee has supplied software under the subscriber Data Note (SDN) network software agreement to Reliance Infocomm Ltd. (RIL) which is used for the purpose of telecommunication network of RIL. For the supply of the said software, the assessee company received the gross consideration of Rs. 16,72,61,927. The software supplied by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in respect of nature of the payment received by the assessee for providing software to RIL, whether the same is royalty or it is consideration towards sale of the software. 5. The Assessing Officer relied on the assessment order for assessment year 2003-04, in which identical issue has been considered by the Assessing Officer and the claim of the assessee was rejected that it was business income and not royalty. When the issue reached before the Tribunal for the assessment year 2003-04 in appeal being ITA No. 2031/Mum/07, the Tribunal confirmed the order of the Id CIT(A) in which it was held that the amount received for allowing use of the software cannot be treated as royalty either under I.T. Act or DTAA. The operative part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find any infirmity in the order passed by the Id CIT(A) and accordingly reject ground No. 1 of the revenue." 6. In the assessment year 2004-05, the ld CIT(A) has dealt with the issue in detail in his order and after examining the relevant clauses of the agreement between the assessee and RIL as well as the provisions of the IT Act and DTAA between India and U.SA., held that payment received by the assessee company is towards the sale of copyright article and does not amount to royalty within the meaning of Article 12(3) of the DTAA between India and USA. In our opinion, there is no difference in the facts and material here before us and accordingly, we follow the order of the Tribunal for assessment year 2003-04 ( supra ) and agree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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