TMI Blog2022 (8) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue as the decision of Hon ble Delhi High Court in DIT vs. Infrasoft Ltd. [ 2013 (11) TMI 1382 - DELHI HIGH COURT ] has been approved by the Hon ble Supreme Court in Engineering Analysis Centre of Excellence (P) Ltd. (supra). Therefore, we reject the appeal of the Revenue and allow the appeal of the assessee. - ITA No. 7749/Del/2019 And ITA No.8282/Del/2019 - - - Dated:- 3-8-2022 - Shri Shamim Yahya, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Nageshwar Rao, Advocate, Ms. Deepika Agarwal, Advocate For the Department : Shri Sanjay Kumar, Sr. DR ORDER PER ASTHA CHANDRA These cross appeals by the Revenue and the assessee arise out of order dated 12.07.2019 of the Ld. Commissioner of Income Tax (Appeals)- 43, New Delhi ( CIT(A) ) pertaining to the assessment year ( AY ) 2015-16. 2. The Revenue has taken the following grounds :- 1) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that the consideration received by the assessee on account of providing Norton security is off the shelf product for individual use for supply of an article, therefore cannot be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2015-16 on 28.09.2015 declaring income at Rs. Nil and claiming refund of Rs. 27,51,82,430/- on account of TDS deducted. The Ld. Assessing Officer ( AO ) noticed that during the relevant financial year the assessee had received amount of Rs. 2,79,11,40,041/- on account of sale of licensed standard software, maintenance and support services to its end user customers in India. The assesee sold application software like Symantec Antivirus Software to the end-users for their self use either directly or indirectly through authorized distributors resellers or service provider in India and not for making copies of its product/software and sell to others thereby making profit by way of exploiting the IPRs which are with the assessee. Further, the software maintenance/support services are provided online through live chat with a technical support agent and by remote computer access. 4.2 After examining the details filed like Distributor Agreement, General and Administrative Service Agreement, License Agreement etc. the Ld. AO required the assessee to show cause as to why additions/disallowances made in earlier years be not made in this year also vide order sheet entry dated 20.09.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clause (ii) of Explanation 2 to section 9(1)(vi) of the Act and Article 12 of the DTAA between India and Singapore. 7. It is the case of the Revenue that the consideration received by the assessee for providing Norton Security is also part of sale of software which is covered under the definition of royalty under section 9(1)(vi) of the Act and India-Singapore DTAA. Moreover, the case of M/s. Infrasoft Ltd. is still sub-judice before the Hon ble Supreme Court. 7.1 On the other hand, the case of the assessee is that software sold by the assessee provides a facility by using which, the purchaser can keep their computer system secure and it is different from the word process used in clause (ii) of the Explanation 2 to section 9(1)(vi) of the Act and in the Article 12(3) of India-Singapore DTAA. The Ld. AR further submitted that the assessee sold the software product in object code form and did not pass on any right to use any process or information concerning industrial commercial and scientific experience. The assessee has not imparted or granted any exclusive right to use any know-how or source code or logic or algorithm of the software to the purchaser. 7.2 The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been inserted in section 9(1)(vi) of the Act but no amendment has been made to the definition under the DTAA and since the provisions of the DTAA are beneficial to the assessee, then the said provisions would be applied. Thus, we hold that the amended definition of Royalty under the domestic law even if amended with retrospective effect cannot be extended to the definition of Royalty under the DTAA since the term Royalty under the DTAA has not been amended. As the provision of DTAA override the provision of Income Tax Act, 1961 and being more beneficial shall apply and since the definition of Royalty has not been amended in the DTAA, receipts by the assessee on sale of copyright Article was not taxable in the hands of the assessee. Before parting, we may also point out that there is no merit in the plea of the Ld. DR for the Revenue that whether the copyrighted Article was processed or not. We reiterate that as per the provisions of DTAA has not been amended and the same being more beneficial, the same are to be applied and the consideration received by the assessee on sale of copyrighted license is not taxable in the hands of the assessee. Ground of appeal No.1 raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t page 97 of Paper Book). Likewise, the appeal of the Revenue against ITAT s order dated 15.04.2021 for AY 2014-15 has been dismissed by the Hon ble Delhi High Court vide order dated 10.05.2022 in ITA No. 147/2022 (copy at page 240 of Paper Book). 11. It is an admitted position that the facts and circumstances of the assessee s case in AY 2015-16 remain the same as in immediately preceding years and the Revenue has accepted Nil income returned by the assessee in AY 2018-19 and 2019-20 following the decision of the Hon ble Supreme Court in Engineering Analysis Centre of Excellence (P) Ltd. (supra). Hence, the dispute between the Revenue and the assesee no longer survives. In this view of the matter, we do not find any substance in the appeal of the Revenue as the decision of Hon ble Delhi High Court in DIT vs. Infrasoft Ltd. (2014) 220 Taxman.273 (Delhi) has been approved by the Hon ble Supreme Court in para 118 of its decision in Engineering Analysis Centre of Excellence (P) Ltd. (supra). Therefore, we reject the appeal of the Revenue and allow the appeal of the assessee. 12. In the result, the appeal of the Revenue is dismissed and appeal of the assessee is allowed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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