TMI Blog2023 (9) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of 5 which the persons referred to in section 195 of the Income-tax Act were not liable to deduct any TDS under section 195 of the Income-tax Act and decided the issue in favour of the assessee. - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Tarun Gulati, Sr. Advocate, Shri Nikhil Gupta, Advocate, Shri Prince Nagpal, Advocate, Shri Rochit Abhishek, Advocate And Shri Devansh G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racterizing the entire revenue as Fees from Technical Services ('FTS') 2.1. The learned AO erred in also ignoring the directions of the learned DRP which has given due regard to the different revenue streams earned by the Appellant and erred in characterizing the entire revenue as FTS without considering the actual nature of the income evident from various invoices and agreement with Indian customers placed on record. 2.2. The learned AO erred in concluding that the receipts from the sale of hardware appliances is taxable as FTS, while the learned DRP directed the learned AO to verify the claim of the Appellant in relation to such income and to treat the same as non-taxable in absence of permanent establishment. 2.3. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the rendition of services is in the nature of business income, not chargeable to tax in light of Article 7 of the India Singapore DTAA. Ground 4 - Without prejudice to the above grounds, the learned AO erred in not considering the beneficial rate under the India- Singapore Double Taxation Avoidance Agreement ('DTAA') to the Appellant 4.1 Without prejudice to the above grounds, the learned AO has erred in determining the tax liability considering the tax rate provided under the Act and not considering the beneficial rate Under the DTAA. 4. At the outset, ld. Counsel for the assessee submitted that the solitary grievance of the assessee is that AO has erred in treating the receipt of sale of software licences as fee for te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT order as under :- 10. We have carefully considered the orders of the authorities below. We are of the considered view that the impugned quarrel is now well settled by the decision of the Hon'ble Supreme Court in favour of the assessee and against the Revenue in the case of Engineering Analysis Center of Excellence Pvt Ltd. [2021] 432 ITR 471 wherein the Hon'ble Supreme Court, in a bunch of appeals, conclusively held 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 distribution agreements/EULAs in the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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