TMI Blog2023 (9) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... , on what basis, he bifurcated the receipts between the sale of products and provision of services is not forthcoming. AO has absolutely not made any discussion about the factual aspect of the issue and the evidences examined by him to come to such conclusion. Though, learned Departmental Representative has tried to make out a case before us that certain invoices of the assessee include service component, however, no such fact has been established on record. On verification of copies of invoices placed in the paper book, we are convinced that they are only in respect of sale of software and do not contain any element of service. Thus, in our view, even a part of the receipts cannot fall within the ambit of FTS. Even, assuming for argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Panel (DRP). 2. The only common dispute arising in these appeals relates to taxability of the amount received from sale of software as fees for technical services (FTS) under Article 12(4) of India-Singapore Double Taxation Avoidance Agreement (DTAA). 3. Briefly, the facts relating to the issue are, the assessee is a non-resident corporate entity incorporated under the laws of Singapore and tax resident of Singapore. The assessee is basically a distributor of software. It also earns income from support services. In the assessment years under dispute, the assessee has earned income from sale of software as well as from provision of support services. The receipts from provision of support services were offered to tax in India a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer to verify the materials on record and tax the receipts of the assessee. In final assessment order, out of the total receipts shown to be from sale of software, the Assessing Officer treated an amount of Rs. 3,55,14,034/- as FTS in assessment year 2018-19 and an amount of Rs. 4,20,17,820/- in assessment year 2019-20 as receipts from technical services, hence, in the nature of FTS. 4. Before us, learned counsel appearing for the assessee submitted that in the immediately preceding assessment year, i.e., 2017-18, while considering the taxability of identical nature of receipts, the Assessing Officer had held that they are in the nature of royalty both under the provisions of the Act as well as India- Singapore DTAA. She submitted, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, hence, taxable as FTS. 7. We have considered rival submissions and perused materials on record. We have also applied our mind to the decision relied upon. As discussed earlier in the order, in assessment year 2018-19, the assessee had received income in India from two steams, i.e., income from support services and income from sale of software. Whereas, in assessment year 2019-20, the only source of income in India to the assessee is from sale of software. 8. So far as receipts from support services, undisputedly, the assessee has offered it to tax in India by treating them as FTS, whereas, the receipts from sale of software were not offered to tax in India, pleading that they are not in the nature of royalty and are business profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or cogent reason, the Assessing Officer has re-characterised the receipts as FTS. 10. Of course, while disposing of assessee s objections, learned DRP has clearly directed that the receipts from sale of software cannot be brought to tax in India and only service component can be treated as FTS. Interestingly, in the final assessment order, while implementing the directions of learned DRP, the Assessing Officer has treated part of the receipts from sale of software as FTS. However, on what basis, he bifurcated the receipts between the sale of products and provision of services is not forthcoming. The Assessing Officer has absolutely not made any discussion about the factual aspect of the issue and the evidences examined by him to come t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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