9911796707
TMI Blog2022 (7) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year(s) 1999-2000 to 2001-2002. The appeals were filed challenging deletion of addition made in the hands of respondent on account of recharacterization of receipts from sale of software licenses to Indian customers/distributors as royalty. The ITAT, while upholding the identical addition made in hands of Gracemac Corporation (subsequently merged with MOL Corporation), deleted the addition made in hands of Respondent on the ground that taxing the same receipts in hands of Respondent would result in double taxation. Subsequently, Cross Objections were filed by the Respondent challenging the findings of ITAT with regard to upholding taxability of software receipts as royalty. The Cross Objections Nos. 18356/2011, 18359/2011 and 18354/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeals before us. In this case, the appellant, Engineering Analysis Centre of Excellance Pvt. Ltd. ['EAC"], is a resident Indian end-user of shrinkwrapped computer software, directly imported from the United States of America ["USA"]. The assessment years that we are concerned with are 2001-2002 and 2002-2003. xxxx xxxx xxxx 97. The AAR then reasoned that the fact that a licence had been granted would be sufficient to conclude that there was a transfer of copyright, and that there was no justification for the use of the doctrine of noscitur a sociis to confine the transfer by way of a licence to only include a licence which transferred rights in respect of copyright, by referring to explanation 2 to section 9(1)(vi) of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 30 of the Copyright Act, as such EULA only imposes restrictive conditions upon the end-user and does not part with any interest relatable to any rights mentioned in sections 14(a) and 14(b) of the Copyright Act. xxxx xxxx xxxx 101. Also, any ruling on the more expansive language contained in the explanations to section 9(1)(vi) of the Income Tax Act would have to be ignored if it is wider and less beneficial to the assessee than the definition contained in the DTAA, as per section 90(2) of the Income Tax Act read with explanation 4 thereof, and Article 3(2) of the DTAA. Further, the expression "copyright" has to be understood in the context of the statute which deals with it, it being accepted that municipal laws which apply in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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