TMI Blog2015 (5) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... re of royalty - Decided against assesse. Re-imbursements of relocation expenses - Held that:- As find that the assessee has filed sample evidence relating to April and May 2004 in support of its claim of relocation and related expenses. From these details, it is clear that the Indian company has incurred expenses on account of employees who are deputed to Indian company. Whether these reimbursements are cost to cost basis and whether these also form part of the fees for technical services needs to be examined by the AO in the light of the evidence produced by the assessee. As the additional evidence filed before us goes to the root of the matter, we are inclined to admit the same and remand the same to the file of the assessing authority with a direction to reconsider the issue de novo. The assessee may file all the required details before the assessing authority. - Decided in favour of assesse for statistical purposes. - IT(TP)A No.1528/Bang/2010 - - - Dated:- 20-3-2015 - Shri Rajpal Yadav And Abraham P.George JJ For the Appellant : Mr. Kaushik Mukherjee, CA. For the Respondent : Mr. Farhat Hussain Quereshi, CIT(DR) ORDER Per Abraham P George, AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Article 12 of the Treaty. 5. That the Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this appeal. 2. Learned counsel for the assessee at the outset submitted that issues raised by it through grounds 1(a), 2(b) and 2(a) (b) have to be decided against the assessee in view of the judgment of the Hon ble jurisdictional High Court in the case of Samsung Electronics Co. Ltd., vs. CIT (345 ITR 494) and the decision of this Tribunal in assessee s own case for assessment year 2005-06 (ITA No.201/Bang/2012 dated 13/06/2014). 3. Issues raised by the assessee in the above mentioned grounds are on treatment of ₹ 26,80,32,271/- and ₹ 1,59,68,374/- received by it from M/s.Intel Technology India Pvt. Ltd. ( ITIPL for short) against software expenditure and cross charges of IT programmes, treated by the lower authorities as Royalty under sec.9(1)(vi) of the Act read along with Article 12 of the DTAA between India and USA. We find that similar issue had come before this Tribunal in assessee s own appeal for assessment year 2006-07 in ITA No.201/Bang/2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould submit only one agreement which was entered into with M/s.Sigrity Inc., USA and the assessee could not explain the basis on which software was charged to the Indian company. He, therefore, held that the receipt could not be treated as reimbursement of expenses on account of software. Thereafter, he proceeded to consider the nature of the transaction and after considering the various aspects of the issue as well as the judicial precedents relied upon by the learned counsel for the assessee, he held that the software supplied to the assessee is not shrink wrapped software but is a software which is used for further software development . Therefore, he held it to be in the nature of royalty u/s 9(1)(vi) of the IT Act as well as DTAA and brought it to tax accordingly. Aggrieved, the assessee is in appeal before us. 5. Shri Kaushik Mukherjee, learned counsel for the assessee, while reiterating the assessee s submissions made before the authorities below, submitted that the assessee-company is a foreign company and had purchased software license from a third party and supplied them to its group companies globally and as per use of the license, such expenses are cross charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessee by the decision of the Hon ble Karnataka High Court in the case of Samsung Electronics Co. Ltd.(supra). The Mumbai Bench of the Tribunal has followed the decision of the Hon ble Delhi High Court in the case of Ericsson A.B.(cited supra). This Bench, being at Bangalore, is bound by the decision of the jurisdictional High Court and therefore, we are inclined to follow the decision of the Hon ble Karnataka High Court and the assessee s ground of appeal is rejected. Since the receipts for the impugned assessment year were also from the very same company and of similar nature, we have no hesitation to dismiss grounds 1(a) and (b) and 2(a) and 2(b) raised by the assessee. 4. Vis- -vis ground 3(a), (b) and 4, learned counsel for the assessee submitted that for similar re-imbursements of relocation expenses, this Tribunal had in its order for assessment year 2005- 06 mentioned supra, remitted the issue back to the AO for consideration afresh for verification as to whether these were only re-imbursements. As per the learned counsel for the assessee, if given an opportunity, it can file evidence to prove that what were received were only re-imbursements for relocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices and the same is chargeable to tax in India. 9. Aggrieved, the assessee preferred an appeal before the CIT(A) who confirmed the order of the AO since the assessee failed to produce any evidence before the CIT(A) to substantiate its claim. Aggrieved, the assessee is in second appeal before us. 10. The learned counsel for the assessee reiterated the submissions made by the assessee before the authorities below but failed to file any evidence even before the Tribunal till 18-2-2014. On the said date, the assessee sought time to collect and file details before this Tribunal in support of its claim of receiving only cost to cost reimbursement of relocation expenses. By letter dated 16-4-2014, the assessee has filed additional evidence in the form of paper book which contains the copies of invoices and supporting documents as well as break-up of relocation expenses for the months of April and May 2004 as well as month-wise break-up of relocation and related expenses for the months of January 2004 and March 2005 and submitted that all other and relevant supporting documents are also available with the assessee. He submitted that since the details are voluminous, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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