TMI Blog2021 (9) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 - Decided in favour of assessee. - ITA Nos. 5591/Del/2017, ITA No. 5592/Del/2017, ITA No. 5593/Del/2017 And ITA No. 6273/Del/2017 - - - Dated:- 30-9-2021 - Shri Kul Bharat, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee by Sh. Prashant Meharchandani, Adv., Sh. Divyansh Singh, Adv. For the Department by Sh. Bhuvnesh Kulshreshtha, CIT. ORDER PER O.P. KANT, AM: These appeals by the Revenue, bearing ITA Nos. 5591, 5592 5593/Del/2017 for assessment years 2012-13, 2013-14 2014-15 respectively are directed against the order of Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the case, and in law, the Ld, CIT(A) erred in deleting the addition made by the AO by erroneously stating that he has relied on the assessee s own case, whereas the first scrutiny assessement of Alcatel Lucent International was for 2013-14. 2. The appellant craves leave to add, modify, amend or alter any ground of appeal at the time of, or before, the hearing of 3. At the very outset, the learned counsel for the assessee submitted that the issues raised by the Revenue have already been adjudicated in favour of the assessee by the order of the Tribunal in the case of DCIT, International Taxation, New Delhi Vs. Alcatel Lucent International France (ITA No.6272/Del/2017 for AY 2013-14, order dated 30.06.2021). 4. The Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et of activities involved in the business use of its customers. Software also made available the process to its customers, who used it to carry out their business activities. In this view of the matter, the AO felt that the consideration of supply of software amounted to royalty under Sect 9(l)(vi) of the Income Tax Act. The CTT( Appeals) - to whom the asses appealed and later the ITAT to whom the Revenue appealed concurred held that the supply of embedded software (which was part of the hardware supplied to the assessee s customers by it) under consideration did constitute royalty and. therefore. Section 9(l)(vi) was not attracted and the same reasons. Article 13(3) of the DTAA was not involved. 5. We have noticed, at the outset, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent existence. The software supply is an integral part of the GSM mobile telephone system and is used by the cellular operator for providing the cellular services to its customers There could not be any independent use of such software. Tin software is embodied in the system and the revenue accepts that it could not be used independently. This software merely facilitates the functioning of the equipment and is an integral part thereof. On these facts, it would be useful to refer to tin judgment of the Supreme Court in TATA Consultancy Service Vs. State of Andhra Pradesh (2004) 271 ITR 401 (SC), wherein the Apex Court held that software which is incorporated on media would be goods and, therefore, liable to sales tax Following discussion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r CD. Thus a transaction sale of computer software is clearly a sale of goods within the meaning of the term as defined in the said Act. The term all materials, articles and commodities includes both tangible and intangible incorporeal property which is capable of abstraction, consumption and use and which can be transmitted, transferred, delivered, stored, possessed etc. The software programmes have all these attributes In Advent Systems Ltd. v. Unisys Corpn, (925 F. 2d 670 (3rd Cir. 1991). relied on by Mr. Sorabjee, the court w as concerned with interpretation of uniform civil code which applied to transactions in goods . The goods therein were defined as all things (including specially manufactured goods) which are moveable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l question of law arises. The appeal is accordingly dismissed. 9. This order of the Hon'ble High Court of Delhi has been upheld by the Hon ble Supreme Court in a bunch of appeals in the case of Engineering Analysis Centre of Excellence Private Limited vide order dated 02.03.2021 and in the bunch of appeals the assessee is at Civil appeal No. 10674 of 2016, 010673 of 2016 and SLP (C) No.28868 of 2016. The relevant findings of the Hon ble Supreme Court read as under:- 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 distribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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