TMI Blog2024 (4) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... s data services as shopping application of the Indian Company, whereby, the Indian Company would use Indix Data services to internally copy, store, reproduce and modify assessee s licensed data for their shopping application. Integrating the Indix Data services into the shopping application and developing shopping application and also use a reasonable number of copies of documentation or materials provided solely in connection with the Indix Data services. From a combined understanding of the assessee s services, as per agreement between the parties and as per provisions of Sec. 9(1)(vi) of the Act, it is clear that the services provided by the assessee to Indian company is in the nature of transfer of right to use a computer software and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt received by the Appellant from M/s.Samsung R D Institute India Bangalore Private Limited (Indian Payee) as royalty income (for the data services provided by the Appellant). 2. The CIT(A) erred in not appreciating the fact that the Appellant had entered into a Production Agreement with Samsung India Electronics Private Limited ( Samsung ) for providing the license to use the Indix Data Services for Samsung's new shopping application (Indix data services aggregates Samsung's shopping application) in exchange for a consideration in the nature of royalty as defined in Explanation 2 to section 9(vi) of the Act and the same is to be taxed @ 10% as per 115A(1)(b)(A) of the Act. 3. The CIT(A) erred in concluding that the tax deducted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons stated in their appellate order dated 27.06.2023, directed the AO to verify Form No.26AS of the assessee and give credit for taxes amounting to Rs. 16,17,656/-. The Ld.CIT(A) further held that the sum received by the assessee from M/s.Samsung R D Institute India Bangalore Pvt. Ltd., is taxable @20% as rightly deducted by the Indian payee, as no information was provided proving the income received to be in the nature of royalty which is taxable as per Sec. 115A(1)(b)(A) of the Act. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. 4. The Ld.Counsel for the assessee, Ms.Pavitra Mani, Advocate, submitted that the Ld.CIT(A) is erred in not appreciating the fact that sum received by the assessee from M/s.Samsu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f royalty and thus, the assessee has rightly offered income as per Sec. 115A(1)(b)(A) of the Act. The Ld.CIT(A) without appreciating relevant facts simply taxed the sum received by the assessee as other sum and taxed @20%. 5. The Ld.DR, Shri ARV Sreenivasan, Addl.CIT, on the other hand, supporting the order of the Ld.CIT(A), submitted that the assessee could not file any evidences, including copy of agreement between the parties before the First Appellate Authority to substantiate its claim, that sum received by the assessee is in the nature of royalty referred to as per provisions of Sec. 9(1)(vi) of the Act. Therefore, the Ld.CIT(A) has rightly taxed sum received by the assessee @ 20% and their orders should be upheld. 6. We have heard bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 9(1)(vi) of the Act. Therefore, the assessee offering income as per Sec. 115A(1)(b)(A) of the Act @ 10% is in accordance with law. The Ld.CIT(A) without appreciating relevant facts and also not considering the agreement between the parties, simply directed the AO to assess sum received by the assessee @ 20% and thus, we set aside the order of the Ld.CIT(A) and direct the AO to assess royalty received by the assessee from Indian Company u/s. 115A(1)(b)(A) of the Act, and charge tax @10%. The AO is also directed to verify Form No.26AS of the assessee and give credit for the taxes amounting to Rs. 16,17,656/-. 7. In the result, appeal filed by the assessee is allowed. Order pronounced on the 13th day of March, 2024, in Chennai. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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