9911796707
TMI Blog2024 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 22.03.2024 passed by CIT(A)", Chennai. 2.0 The only issue in this case is regarding an addition of Rs. 14,44,380/- added by the revenue by the order u/s 201(1) / 201(1A) dated 31.03.2017. The Ld. Counsel for the assessee informed that it had remitted an amount of Rs. 14,44,380/- towards purchase of software to a US based company namely XY enterprises Inc. The Ld. AO held the view that explanation-IV to section 9(1) (vi) of the IT act as amended by finance act 2012 postulates that amounts paid for right to use computer software would tantamount to income of the deductee within the meanings of that section and therefore TDS deduction u/s 40(a)(i) was required to be done. Consequently by placing reliance upon some case laws of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Pvt Ltd vide order dated 03.08.2022 in ITA No.799/Chny/2017 has held as under: "....We have heard the rival contentions and had gone through the facts and circumstances of the case. The brief facts of the case are that the assessee has purchased off-the-shelf software products which are in the nature of Microsoft Office [MS Office], IBM Lotus Notes, AVEVA, Auto CAD, etc. The claim of the Assessee is that the said expenditure merely represents the cost-to-cost reimbursement of the expenditure incurred on behalf of the Assessee. The Assessing Officer has held the nature of payment to be royalty and had disallowed the expenditure on account of the non-withholding of taxes under Section 40(a)(i) of the Act. The main issue is as regards to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case. Accordingly, the Assessing Officer's decision is correct and the objections are not accepted." Aggrieved, the Assessee is in appeal before the Tribunal. 16. We noted that during the year 2011 - 2012 relevant to the Assessment Year, the Assessee debited an amount of Rs. 7,79,78,139/- under computer software and maintenance. According to the Assessing Officer, the Assessee has to deduct Tax Deducted at Source [TDS] and under the Domestic Law the above payment is treated as "Royalty" and is taxable in India u/s. 9(1) Explanation (vi)(b) of the Act and the Assessing Officer on the directions of the Dispute Resolution Panel had made the addition of this computer software and maintenance payment considering the same as "Royalty" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus not liable for withholding of tax u/s 195 of the Act, we delete the disallowance and allow this issue of the Assessee. 4.0 We have also noted that Hon'ble Madras High Court in the cases of Saipem India PVt Ltd, Dasault, Financial software supra have also held that in view of the apex court decision in the case of Engineering Analysis supra no TDS deduction is required in cases having facts as that of present assessee. In respectful compliance to the impugned decisions the order of lower authorities set aside and the Ld. AO is directed to delete the impugned addition. Accordingly, all the grounds of appeal raised by the assessee are allowed. 5.0 In the result the grounds of appeal raised by the assessee is allowed. Order pronounced o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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