2011 (5) TMI 586

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..... pondent. ORDER Rajendra Singh, Accountant Member. - This appeal by the assessee is directed against the order dated 30-1-2009 for the assessment year 2005-06. The only dispute raised by the assessee is regarding taxability of Rs. 12,92,68,070 receivable from the assessee from Standard Chartered Bank (SCB) as royalty. 2. Briefly stated facts of the case are that the assessee who was tax reside .....

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..... edded secret software provided by the assessee for processing raw data also fell within the ambit of Article 12(3)(a) of DTAA. The Assessing Officer accordingly taxed payment as royalty. 3. The assessee disputed the decision of the Assessing Officer and submitted before CIT(A) that providing services for processing of data of customers was part and parcel of normal business activity of the assess .....

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..... the order of Assessing Officer assessing the amount as royalty. Aggrieved by said decision the assessee is in appeal before Tribunal. 4. Before us ld. AR for the assessee at the very outset pointed out that the same issue had already been decided by the Tribunal in assessee's own case in ITA No. 1457/Mum./2008 for assessment year 2004-05 in which Tribunal allowed the case of the assessee holding .....

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..... assessment year 2004-05 in which the Tribunal noted that as per definition in Article 12(3)(b), royalty meant payment of any kind received as a consideration for use or right to use any industrial, commercial or scientific equipment, other than payments received from activity described in para-4(b) of Article 8. The Tribunal observed that in the context and collocation of 2 expressions 'use' and .....

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..... cept for transmitting raw data for further processing. The assessee had no control over computer hardware or physical access to it. Therefore, there was nothing to show any positive act of utilization, application or employment of equipment for the desired purpose. The Tribunal accordingly held that payment was not royalty within the meaning of Article 12(3)(b). Facts, in this year are identical. .....

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