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Judgment
This appeal by the assessee is preferred against the order dated 31.12.2020 framed u/s. 143 (3) r.w.s. 144 C (13) of the Act.
The grievance of the assessee read as under :-
Briefly stated the facts of the case are that the assessee company is formed under the laws of Singapore and the company does not have any presence in India either by way of a Permanent Establishment (PE) or fixed base as defined under Article 5 of the DTAA between India and Singapore.
The assessee filed its return of income on 30.10.2017 declaring total income at Rs. Nil. The return was selected for complete scrutiny under CASS and accordingly statutory notices were issued and served upon the assessee.
Taking a leaf out of the assessment proceedings for A.Y. 2014-15, 2015-16 and 2016-17 the AO came to the conclusion that the receipt of Rs.2063861802/- claimed as sale of software is nothing but royalty with respect to the use of the computer software by the end users together with or without technical support taxable u/s. 91 (vi) of the Act as well as DTAA and taxed the same as royalty.
Objections raised before the DRP were dismissed as DRP itself followed its findings given in A.Y. 2014-15, 2015-16 and 2016-17.
Before us the Counsel for the assessee drew our attention to the decision of the Tribunal given in earlier assessment years and pointed out that the quarrel has been decided in favour of the assessee and against the revenue following the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence Private Limited 432 ITR 472.
The DR could not bring any distinguishing decision in favour of the revenue.
We find force in the contention of the Counsel this Tribunal in A.Y.2013-14, 2014-15 and 2015-16 has decided the impugned quarrel in favour of the assessee and against the revenue and the order of this Tribunal in A.Y. 2013-14 and 2014-15 has been affirmed by the Hon’ble Delhi High Court. These facts have been captured by this Tribunal in ITA No.6665/Del/2019 for A.Y.2016-17. The relevant findings read as under :-
As no distinguishing decision has been brought to our notice by the revenue respectfully following the decision of the coordinate Bench (supra) ground No.1 is allowed.
Ground No.2 is academic in nature qua the decision of ground No.1 and the same is accordingly dismissed.
Ground No.3 relates to non grant of TDS while computing demand for the year.
We are of the considered view that this issue need to be relooked by the AO and, therefore, we set aside this issue to the files of the AO and the AO is directed to grant TDS as per provisions of the law after affording a reasonable and adequate opportunity of being heard to the assessee.
In the result, the appeal is partly allowed.
Decision announced in the open court on 27.09.2022.