TMI Blog2009 (10) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ited application and the principle therein cannot be applied to the peculiar facts of the instant case inasmuch as the amount received by the assessee under the license agreement was in lieu of allowing the use of software and thus it cannot be termed as a royalty either under the Income Tax Act or under DTAA. In the light of the decisions cited by the learned counsel appearing on behalf of the assessee and in the absence of any contrary view taken on this issue, we do not find any infirmity in the Order passed by the learned CIT (A) and accordingly reject ground No. 1 of the Revenue. Upon hearing ld DR as well as the learned counsel appearing on behalf of the assesses, we are of the opinion that in the interests of substantial justice the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT (A) erred in holding that interest u/s 234B is not payable by a non-resident whose entire income is subject to deduction of tax at source and in directing the Assessing Officer to delete the interest levied u/s. 234B of the Act. 2. The assessee, a non-resident company, is engaged in the business of developing designs etc., During the year under consideration, the assessee-company entered into three different contracts with Reliance Infocomm Limited (hereinafter referred to as Reliance ). We are concerned herein with the amount received by the Company from Reliance in lieu of supply of software to Reliance with a right to operate for its business purpose. Reliance could also make copies of the software for its own internal operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly, the issue stands squarely covered by the decision of the ITAT, Delhi, (Special Bench) in the case of Motorola Inc. v. Dy. CIT [2005] 95 ITD 269. Learned Departmental Representative made a feeble attempt to place reliance upon the decision of the Apex Court in the case of TATA Consultancy Services v. State of Andhra Pradesh [2004] 271 ITR 401 to submit that software falls within the definition of goods and hence there was transfer of rights in the software and thus the Assessing Officer was justified in considering the receipt as royalty payment towards transfer of the goods. Learned counsel however, placed reliance upon the decision of ITAT, Delhi Bench, in the case of Infrasoft Ltd. v. Asstt. DIT [2009] 28 SOT 179 to submit that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee without verifying as to whether there were two payments of identical amount or only one payment. Upon hearing learned Departmental Representative as well as the learned counsel appearing on behalf of the assesses, we are of the opinion that in the interests of substantial justice the matter deserves to be restored to the file of the Assessing Officer who is directed to verify as to whether there were two separate payments or one payment and if it is found that there is only one payment the plea of the assessee deserves to be accepted. However, since the issue is not examined in proper perspective, the Assessing Officer is directed to reconsider the matter in accordance with law. 7. Vide ground No.3 the Revenue contends that the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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