TMI Blog2015 (5) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Rajesh Damor For the Respondent : Shri C.H. Naniwadekar ORDER Per Sushma Chowla, J.M: All these appeals filed by the Revenue are against the consolidated order of CIT(A)-IT/TP, Pune dated 21.03.2013 relating to assessment years 2008-09, 2009-10 and 2010-11 passed under section 201(1)/201(1A) of the Income Tax Act, 1961. 2. All the appeals relating to same assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. The facts in all the years under appeal are identical. However, we make a reference to the facts in ITA No.1172/PN/2013 to adjudicate the issue. 3. The Revenue has raised similar grounds of appeal in all the years and the grounds of appeal in assessment year 2008-09 read as under:- 1. On the facts and circumstances of this case, the Ld. CIT(A) was not correct in holding that the payment made for transfer of user rights of softwares and availing other services such as maintenance of software, training are not taxable under Article 12/13 of the double Taxation Avoidance Agreement (DTAA) between India and USA/UK/Singapore. 2. On the facts and circumstances of this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of this case, the Ld. CIT(A) was not correct in holding that payment for maintenance and training cannot be taxed as fees for technical services' under Article 13(4)(b) of DTAA as the companies rendering services have not 'made available' any technical knowledge experience, skill, know-how etc, which would enable the assessee acquiring the services to apply the technology contained therein specially when conclusion is not based on any documentary evidence and without analyzing the nature of services provided by the service providers and when it is not a ground of appeal raised by the appellant. 8. On the facts and circumstances of this case, the Ld. CIT(A) was not correct in holding that the assessee has not acquired any such technical inputs for its own use from the companies rendering such services, when in fact the assessee does acquire the technical inputs during the maintenance and training services provided by the services provider, which then are utilized continuously for its own use. 9. The appellant craves leave to add to or modify any of the grounds of appeal. 4. The grounds of appeal No.1 and 4 raised by the Revenue are general in na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax was deductible on such payments. Further, it was pointed out that with respect to purchases of computer parts and hardware, the Assessing Officer had inadvertently considered the payments made for the purchase of hardware along with the payments made for the purchase of software, possibly, because the same party had also supplied the software. However, the said payments towards purchase of computer software or hardware do not attract the provisions of section 195 of the Act. 8. The learned Authorized Representative for the assessee placed reliance on the ratio laid down by the Hon ble Delhi High Court in DIT Vs. Nokia Networks OY (ITA No.512 of 2007) for the proposition that the retrospective amendment to section 9(1)(vi) of the Act could not be read into the tax treaty. Reliance was placed on series of decisions before the CIT(A). The CIT(A) noted that the assessee had made payments during the year for the following purposes:- i) Purchase or license of computer software ii) Annual maintenance charges iii) Fees for accessing data base iv) Training and implementing charges v) Purchase of computer parts or hardware 9. With regard to payments made for purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) that the same also could not be taxed as fees for technical services under DTAA. Thus, the CIT(A) held that the payments made for purchase of software and availing other services are taxable under the Income-tax Act, but are not taxable under the respective DTAAs and consequently, the assessee was not required to deduct tax on such payments. 11. The Revenue is in appeal against the order of CIT(A). 12. The learned Departmental Representative for the Revenue placed reliance on the order of Assessing Officer and pointed out that where there was license to use software, then the assessee was liable to deduct tax at source and since the assessee has failed to so deduct the tax at source, was liable for the demand raised under section 201(1) of the Act and interest under section 201(1A) of the Act. 13. The learned Authorized Representative for the assessee pointed out that the amendment by way of Explanation 4 to section 195 of the Act cannot be applied retrospectively. Reliance in this regard was placed on the ratios laid down in the following decisions:- i) Director of Income Tax Vs. Infrasoft Ltd. (2013) 96 DTR (Del) 113 ii) New Bombay Park Hotel Pvt. Ltd. Vs. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of computer parts or hardware 16. The Finance Act, 2012 had amended the provisions of section 9 of the Act by way of Explanation 4, with retrospective effect from 01.06.1976 and the payments made for acquiring license of software has been made taxable under the Income-tax Act. The issue arising before us is limited to the aspect that in such circumstances, can the assessee be held to be in default for non-deduction of tax at source relying on the subsequent amendments made in the Act with retrospective effect? 17. We find that Mumbai Bench of the Tribunal in New Bombay Park Hotel Pvt. Ltd. Vs. ITO (Intr. Taxation) (supra) has held as under:- If the entire services rendered by the foreign company to the assesses in respect of phase one and two outside India, then the same cannot become chargeable to tax in the hands of the foreign company in India. Unless the amount paid by the assessee company to the foreign company does not become chargeable to tax in India then the question of applicability of section 195 does not arise. Therefore, without considering the amendment brought into the statute by Finance Act 20I2 with retrospective effect from 01.06.1976 it has to be he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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