TMI Blog2022 (10) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... e in VERINT SYSTEM LIMITED [ 2023 (1) TMI 464 - ITAT DELHI ] as held this issue is covered in this issue is squarely covered in favour of the assessee and against the Revenue as relying on decision of Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT ] and also Intrasoft Ltd. [ 2013 (11) TMI 1382 - DELHI HIGH COURT ] Grant of tax credit without considering the provisions of section 240 - HELD THAT:- We find that while giving appeal effect, the AO should have considered the provisions of section 240 - We, therefore, direct the AO to consider the provisions of section 240 of the Act while giving appeal effect to our order. - SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N. K. BILLAIYA , ACCOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s merely a sale of copyrighted article and has not resulted in transfer of any right in relation to a 'copyright' embedded in the said software and therefore, payments received by the Appellant do not constitute 'royalty' 1.3 That Ld. AO/DRP erred in disregarding the facts that the definition of 'royalty' as per the DTAA is restricted, since it treats only consideration for 'use of or the right to use any copyright of literary, artistic or scientific work as royalty and does not include those cases where there is only use of a 'copyrighted article'. 1.4 That the Ld. AO/DRP erred in disregarding the decisions rendered by the jurisdictional Delhi High Court in DIT v. Infrasoft Ltd [20131 39 taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 2011-12. In spite of this receipt, the assessee did not file return of income, and accordingly, notice u/s 148 of the Act was issued and served upon the assessee, in response to which the assessee filed its return of income. 5. During the course of scrutiny assessment proceedings and drawing support from the definition of Royalty given in Section 9(1)(vi) of the Act r.w. Article 12 of the India Israel DTAA, the Assessing Officer formed a belief that total income of the assessee has to be taxed as royalty @ 10% as per India Israel DTAA and, accordingly, completed the assessment proceedings. 6. Objections raised before the DRP were of no avail. 7. Before us, the ld. counsel for the assessee, at the very outset, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the decision of theHon ble Delhi High Court in the case of DIT vs Intrasoft Ltd. 264 ITR329 (Del.). Accordingly, ground nos. l to 5 are allowed. 6. Respectfully following the decision of the co-ordinate bench [supra], Ground No. 1 with its sub-grounds is decided in favour of the assessee. With this finding, issues raised vide Ground No. 2 become academic and, therefore, needs no separate adjudication. 7. Quarrel raised vide Ground No. 3 relates to grant of tax credit without considering the provisions of section 240 of the Act 8. Having heard the rival contentions, we have carefully perused the orders of the authorities below. We find that while giving appeal effect, the Assessing Officer should have considered the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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