TMI Blog2023 (3) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... oftware. The ratio laid down by the Hon ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] would squarely apply to assessee s case. The amount received by the assessee from sale of software is not in the nature of royalty under Article 12(3) of India USA DTAA. Accordingly, we direct the Assessing Officer to delete the addition. Grounds are allowed. - ITA No.9823/Del/2019 - - - Dated:- 17-2-2023 - Shri G.S. Pannu, Hon ble President And Shri Saktijit Dey, Judicial Member For the Appellant : Sh. Nageshwar Rao, Advocate, Ms. Deepika Aggarwal, Advocate For the Respondent : Sh. Sanjay Kumar, Sr. DR ORDER PER SAKTIJIT DEY, JM: This is an appeal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount received as royalty. However, finding that various mistakes have crept into the assessment order, on the very same date, the Assessing Officer passed an order purportedly under section 154 read with section 143(3) of the Act holding that the amount received by the assessee towards sale of software is in the nature of royalty under Article 12(3) of India USA DTAA. While coming to such conclusion, the Assessing Officer heavily relied upon the decision of the Hon ble Karnataka High Court in case of CIT Vs. Samsung Electronics Co. Ltd. [TS-696-HC-2011 (Ker.)] and another decision of the Hon ble Karnataka High Court in case of CIT Vs. Synopsis International Old Ltd. (ITA No.15 17 of 2008). He did not apply the ratio laid down in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the software. 5. It is further observed, the departmental authorities, while treating the amount received from sale of software as royalty, have heavily relied upon the decision of the Hon ble Karnataka High Court in case of Samsung Electronics Ltd. (supra). However, the issue is no more res intera in view of the authoritative ratio laid down by the Hon ble Supreme court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT (2021) 432 ITR 471, wherein, the Hon ble Supreme Court after interpreting the meaning of royalty as defined in the Income Tax Act and various treaties as well as under the Copyright Act, has concluded that where the consideration received is for sale of a copyrighted Article, it cannot be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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