TMI Blog2021 (9) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... he DRP - plea for remanding of the case to the AO/TPO cannot be accepted in the facts and circumstances of the present case. Accordingly, following the earlier orders of the Tribunal, we hold that income of the assessee which was brought to tax by the Revenue authorities cannot be brought to tax and the same is directed to be deleted. - Appeal of the assessee is allowed. - IT(TP)A No. 1861/Bang/2017 - - - Dated:- 20-9-2021 - N.V. Vasudevan, Vice President And Chandra Poojari, Member (A) For the Appellant : Manasa Anantha, Advocate For the Respondents : Neera Malhotra, CIT(DR) ORDER Per N. V. Vasudevan, Vice President This is an appeal by the assessee against the final Order of Assessment dated 14.07.2017 by the DCIT(International Taxation), Circle - 1(1), Bengaluru, passed under section 143(3) r.ws. 144C(5) of the Income Tax Act, 1961 (hereinafter called 'the Act'), relating to Assessment Year 2014-15. 2. In this appeal, the question for consideration is whether the assessee who is a non-resident and tax resident of Singapore in terms of the India-Singapore Double Taxation Avoidance Agreement (DTAA) who acts as a distributor of computer software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ense agreement between the Assessee and Autodesk Inc., USA. Under Article II - License Grant of the Agreement with Autodesk Inc., USA and the Assessee is reproduced below for reference (Autodesk in this agreement refers to Autodesk Inc., USA and Licensee refers to the assessee). ARTICLE II - LICENSE AGREEMENT Autodesk hereby grants to License and Licensee accepts from Autodesk, under all of Autodesk's Intellectual Property Rights and Confidential Information, an exclusive right and license to: 1. Use, reproduce (as provided in Article II.0 below), distribute, support, modify and create derivative works, translated and localized versions of the Software Products and Documentation and subcontract to Third Parties to perform such activities; 2. Grant sublicenses to Third parties to use and distribute the software products (in object code form only) and documentation by sublicensing directly to end users or indirectly through other third parties which may be granted similar rights, including the right to distribute by sublicensing directly or indirectly to end users; provided that any such grant/sublicense shall be subject to a written agreement with terms no less pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to distribute by sublicensing directly or indirectly to end users. Use, the trademarks, service marks, trade names, logos and other trade designation ( Marks ) of Autodesk Inc. with respect to the Autodesk Software Products or its business. Market the services and subcontract Third Parties to perform such activities. 6. The assessee submitted that there was no right to use the software. Therefore, the receipts by the assessee cannot be taxed in India. Assessee also submitted that it has no physical presence in India and the sums were received outside India and therefore no income is taxable in India. 7. The AO and the DRP did not agree with the submissions of the assessee and the DRP in doing so followed the orders in assessee's own case for Assessment Year 2011-12 to 2013-14 on identical issues. Against the final Order of Assessment, the assessee is in appeal before the Tribunal. 8. At the time of hearing, learned Counsel for the assessee brought to our notice that the Tribunal decided identical issues in Assessment Years 2010-11 to 2013-14 in IT(TP)A No. 1758/Bang/2013, 294/Bang/2015, 489/Bang/2016, 191/Bang/2017 by its order dated 14.06.2021. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an integrated unit/equipment. Hon'ble Supreme Court, considered various arguments advanced by the Revenue as well as the assessee's and came to the conclusion as under: CONCLUSION 168. Given the definition of royalties contained in Article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the income Ta Act (section 9(1)(vi, along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. 169. Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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