TMI Blog2012 (8) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... or treating the assessee as in default - matter is restored to the file of the CIT for examining - appeals are allowed for statistical purposes - IT APPEAL NOS. 5236 TO 5238 (MUM.) OF 2005 - - - Dated:- 29-2-2012 - R.S. Syal, N.V. Vasudevan, JJ. Farrokh Irani for the Appellant. Jitendra Yadav for the Respondent. ORDER Per Bench These three appeals by the assessee arise out of separate orders passed by the Commissioner of Income-tax (Appeals) on 31.05.2005 against the A.O.'s orders u/ss 195(1), 195(2) and 201 read with section 201(1A) of the Income-tax Act, 1961, in relation to the assessment year 2004-2005. 2. We are taking up ITA No.5238/Mum/2005 which is against the order passed by the A.O. u/s 201 and 201(1A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving acquired the Copyrighted Article for its own business use. 4. The Appellant prays that it be held that the payments of US$ 1,36,832.23 and US$ 1,23,229.02 are towards purchase of software product and its modification, customization and implementation, hence not royalty under section 9(1)(vi) of the Income tax Act, 1961 as well as under Article 12 but are "business Profit" covered under Article 7 of Indo-Singapore Treaty for Avoidance of Double Taxation requiring no deduction of tax at source since Apex is not having a PE in India. Ground No.2 1. The CIT(A) erred in holding the payments of US$25,850.67 towards Annual Maintenance Charges (AMC) for 32 PRO-IV users, (hereinafter referred to as "the said payments") as "Fees for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information was called for. In the meantime, the assessee also filed application for Nil deduction of tax at source on 24.10.2003. All these matters were clubbed before the Assessing Officer in question who passed the order on 16.01.2004, against which the impugned order was passed. On being called upon to explain as to why no tax was deducted at source on the payment made to M/s. Apex Systems Pte. Ltd., the assessee filed a copy of agreement relating to purchase of license, software, maintenance charges and AMC. On the perusal of these details, the Assessing Officer considered section 9(1)(vi) of the Income-tax Act, 1961 and came to the conclusion that the payments so made were in the nature of royalty covered u/s 9(1)(vi). The contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the payment u/s 9(1)(vi) of the Act. In that view of the matter it is not possible to decide the assessee's appeal on the question of section 9(1)(vi) as per above ground no. 1.2. The decision on this aspect is very crucial for the final decision in the present appeal. It is simple and plain that the if taxability is not attracted as per section 9 of the Act, then notwithstanding any positive provision in the DTAA including such payment within the ambit of 'Royalty' or 'Fees for technical services', no tax can be charged on the total income of the non-resident. Naturally if the charge is not attracted, there can be no question of any deduction of tax at source or treating the assessee as in default. If however, the amount in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. If however, he holds that the amount is taxable under the Act, then it would require consideration at the end of the Tribunal both under the Act as well as the DTAA. In such a case he should reincorporate his finding on the DTAA so that the assessee's grievance may be addressed in entirety by the tribunal against such fresh order to be passed. With these remarks, we restore the appeal to the file of the learned CIT(A) for passing appropriate order as per law after allowing a reasonable opportunity of being heard to the assessee. 5. No separate arguments were advanced by the ld. AR in respect of the other two appeals against the orders u/s 195(1) and 195(2). The obvious reason is that the order u/s 201 will have direct consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X
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