Income Tax Appellate Tribunal - Delhi
Ge Precision Healthcare Llc, Usa vs The Assistant Commissioner Of Income ... on 17 January, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'D', NEW DELHI
Before Sh. Saktijit Dey, Vice President
Dr. B. R. R. Kumar, Accountant Member
ITA No. 2623/Del/2023 : Asstt. Year: 2021-22
GE Precision Healthcare LLC, Vs ACIT,
3000 N, Grandview Blvd, Waukesha, Circle 1(3)(1),
Wisconsin, USA 53188 New Delhi
(APPELLANT) (RESPONDENT)
PAN No. AAHCG6915E
Assessee by : Sh. Ravi Sharma, Adv.
Revenue by : Sh. Vizay B. Vasanta, CIT-DR
Date of Hearing: 18.10.2023 Date of Pronouncement: 17.01.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the as sessee against the order dated 22.08.2023 passed by the AO u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961.
2. Following grounds have been raised by the assessee:
"1. On the facts and circumstances of the case and in law, the order dated August 22, 2023, passed by the Learned Assistant Commissioner of Income Tax, Circle 1( 3)(1), International Ta x, Delhi (L d. AO') under sectio n 144C (13) read with section 143(3) o f the Inco me-tax Act, 1961 ('the Act) is invalid, erroneous and bad in law;
1.1 O n the facts a nd circumstances of the case and in law , the Respo ndent/DRP grossly erred in assessing the total income of the Appellant at INR 21,51,11,064 as agains t the returned income of INR 9,18,94,072 declared by the Appellant;
2 ITA No. 2623/Del/2023GE Precision Healthcare LLC
2. On the facts and circumstances o f the case and in law , the Respo ndent/DRP grossly erred in ta xing the rece ipt of softw are sub- lice nse fees as income from o ther sources under section 56 of the Act and Article 23(3) o f the India- USA Do uble Tax Avoidance Agreeme nt ( DAA').
3. On the facts and circumstances o f the case and in law , the Respondent/DRP grossly er red in no t apprec iating that the receipt from software sublicensing is in the natur e of business income and canno t be taxed in the absence of Permanent Establishment of the Appella nt in India.
4. On the facts and circumstances o f the case and in law , the Res ponde nt/ DRP grossly erred in not appreciating the true nature of the commercial tools/ so ftware s upplied for the purpose o f business and erred in drawing an analogy from the income statement of Indian Associated Enterprise of the Appe ll ant.
5. On the facts and circumstances o f the case and in law , the Respondent/ DR P ought to have appreciated the business model a dopted by the Appellant and erre d in apply ing "o ther income' prov isio n which is no thing but a residuary clause both unde r the Act as we ll as the DTA A.
6. On the facts and circumstances o f the case and in law , the Respo ndent has erred in making an additio n of INR 1,56,61,460 unde r the head business and pro fession without as cribing a reason fo r such adjus tment.
7. On the facts and in the circumstances of the case and in law, the Respondent erred in le vying interes t under se ction 234A and section 234B of the Act.
8. On the facts and in the circumstances of the case and in law, the Respondent erred in levying fees of INR 10,000 under sec tion 234F of the Act.
9. On the facts and circumstances o f the case and in law , the Res ponde nt has e rred in pro posing to initiate the pena lty proceedings under section 270A of the Ac t."
3. Heard the arguments of both the parties and peruse d the material available on record.
3 ITA No. 2623/Del/2023GE Precision Healthcare LLC
4. GE Precision Healthcare LLC, is a company incorporated in the s tate of Delaware , USA. It carries on healthcare business for the General Electr ic group, and is a global medical device provider that designs, develops, manufactures and distr ibutes diagnostic imaging and clinical systems, products and services for drug discovery, biopharmaceutical manufacturing, and cellular technologies, imaging agents used during medical scanning procedures, and a range of healthcare information technology so lutions.
5. The Asse ssee also provides services such as performance impro vement and performance solutions services , computerized data management, and remote diagnostic and repair services of medical equipment manufactured by the Assesse e and o thers. The Assessee conducts its oper ations across the world through subsidiaries and affilia tes.
6. The assessee filed its return of income on 31 March 2022 declaring total income of Rs.9,18,94,072 /- and claimed refund for Rs. 1, 19,86,620/- The details of the Re venue of the assessee are as under:
S.No Particulars Taxable/Non- Amount taxable 1 Income from Nil 10,75,55,532 sublicensing of standardized software tools to affiliates in India 2 Fee for Offered to 9,17,39,690 technical tax 4 ITA No. 2623/Del/2023 GE Precision Healthcare LLC services received from affiliates in India (offered to tax under section 9(1)(vii) of the Act) 3 Interest on Offered to 1,54,382 income tax tax refund Total 19,94,49,604/-
7. The assessee has received receipts of Rs. 19,94,49,604/- from rendering certain technical services to its affiliates in India. Also, the Assessee in the course of its business had sub-licensed certain standard software tools to its affiliates in India for their internal use. During the assessment proceedings before the Assessing Officer the assessee submitted that it does not have a business connection in India u/s 9(1)(i) of the Income-tax Act, 1961 and the software sold by it does not fall under the ambit of 9(1)(vi) of the Income-tax Act, 1961 and is covered by the decision of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence Pvt. Ltd vs CIT [2021] 125 taxmann.com 42 (SC).
8. The Assessing Officer did not agree with the contention of the assessee that the software sold by it does not fall under the ambit of 9(1)(vi) of the Income-tax Act, 1961 and held that payment for the use of the software was taxable u/s. 56 of the Act, r.w. Article 23 (3) of the India-USA DTAA.
9. Aggrieve d the assessee sought directions of the ld. DRP.
5 ITA No. 2623/Del/2023GE Precision Healthcare LLC
10. The issue before us pertains to taxability of the "software" supplied to Indian affiliates. The Assessing Officer treate d the amount as ta xable u/s 56(1) of the Income Tax Act 1961 r.w.Article 23 (3) of the India-USA DTAA.
11. The ld. DRP in the directions send by two Members of the DRP-1, New Delhi namely Shri Anshuman Pattnaik and Shri Sanjay Kumar Bharathi affirmed the order of the Asse ssing Officer relying on the order of the ld. DRP for the asses sment year 2020-21. The relevant par t of the said order of the ld. DRP is as under:-
3 .5 Th e an n u a l r ep o rt o f t he I n di a n A E f o r F . Y. 2 0 1 9 -2 0 - W i p r o G E H ea lt h ca r e Po t . Lt d . - i s a v a il a bl e in t h e pu b li c d o ma in . In for mat i on f ro m th i s r ep o rt w a s c r o s s- ch e ck ed wi th t h e a s s e s s e e t hr oug h a n oti c e u / s 1 4 2 ( 1 ) o f th e I n c om e - t a x A ct , 1 9 6 1 i s su ed on 0 8. 0 2 .22 , an d n o obj e c ti on w a s ra is e d b y th e a s ses s e e a ga i n s t t h e u se of t h e AE ' s An nu a l R ep o rt . T h e a s s e ss e e d i d n ot ra i s e a n y is s ue t o th e af o r e said n ot i c e . A s p e r th e s eg m en t a l i nf o r ma t i on , 2 1 % of th e In dia n en t it y ' s r e v en u e c om e s f ro m ' Sa l e of S e r oi c es - S o ft w a r e In c o m e' . Th i s c o r r es p on d s to a total tu rn ov e r of Rs. 1 1, 0 0 ,56 ,0 0 ,0 0 0 .00 du rin g t h e s u bj e ct y ea r. 3 .6 Th e A O n ot e d t h a t a s p e r t h e R ela t ed P a rt y S c h ed ul e , ' S o ft w a r e R e v en u e - [ f r om ] f ell ow su bs i dia ri e s ' I s t s a t ot a l r e v en ue o f R s . 1 0, 6 7 ,03 ,0 0 ,0 0 0 .00 f ro m G E P r e ci si on H ea l th c a r e LL C ( p a g e 4 0 o f th e A n nu a l R ep o rt ) . H e a c c o rdi ng l y con c lu d ed t ha t 9 7 % o f th e in c om e f r om th e A E ' s s o ftw a r e s e r oi c e s i s fr om sa l es b a ck t o t h e as s e ss e e a n d h e l d a s f oll o w s:
I . Wi th r e s p e c t t o th e a ct i vi ty o f s oft w a r e l ic en s e s , th e a s s e ss e e is in v ol v ed wi th s ol el y i t s a f fi li a t e s / G E g r oup ent i ti e s.
I I. Th e a s s e s s e e t a k e s n o ri s k n o r ent r ep r en eu ri a l a c ti v it y in s ub -l ic en si ng th es e so ft wa r e a pp li ca t i on s f r om t h i rd p a r t ie s a n d fu rth e r su b -li c e n si ng t h e m t o i t s a f fi li a t e s, i n cl ud in g W ip r o GE.
I II . F o r a ll t h e s o ft w a r e su b- li c ens e d b y t h e a s s e s s e e t o th e W ip r o- G E ( I n di a n A E) , t h e A E m a k e s us e of th e sof t wa r e t o ea rn s e r vi c e in c o me w h i c h c on sti tu t e s 2 1 % of it s o v er a ll r ev e n u e f r om op e ra ti on s . D u r in g th e su b je ct y e a r, 97 % o f th is 6 ITA No. 2623/Del/2023 GE Precision Healthcare LLC s oft w a r e i n c o m e w a s ea rn ed by t h e A E t h r ou gh s a l e o f s oft w a r e s e rv i c e s t o t h e a ss e s s e e.
I V. Th u s, t h r oug h th e s o ftw a r e sub - li c en s e d b y t h e a s se s s e e to t h e A E on a p e r- us e r p e r- m on th b a s is , sa l e s a r e m a d e ba c k to th e a s s es s e e . I n th i s r ega rd , t h e a ss es s e e ' s c on t en t ion s w it h r e s p e c t t o th e sh ow ca u s e n o t i c e a r e n o w c on si d e r ed . Pr i m a r i ly , th e a s s e s se e ha s c on t en d ed t ha t t h e i n c o m e f r om s ub li cen s in g of s o ft w a r e t o W i p ro - G E i s b u si n e s s in c om e u /s 9 (1 )( i ) o f t h e In c o me -t a x A ct , 1 96 1 , w h i ch i n t h e a b s en c e of P E, i s n o t t a xa b l e .
3 .7 Th e A O fu rth e r n ot ed t h a t A rti cl e 7 of th e In di a n D T A As d ea ls w it h ta xa ti on of i n t e rn a ti ona l bu si n es s p r of it s . A s p e r w hi ch th e s ou rce cou n t ry m a y t a x th e b u sin e s s p r ofi ts o f a n on - r e s id en t in In dia if t h e n on- r e s id ent o p e ra t e s in I n di a t h r oug h a P er man en t E st a bl i sh m en t ( P E) . Th e P E t h r esh o l d ru l e i s b a s e d o n ph y si c al pr e sen c e of t h e n on -r e s id en t . Ho w ev e r , a s th e dig it a li z e d b us in e s s es do n o t r equ i r e a p h y s ic a l p r e s en c e m a s ou r c e c ou n t r y a nd m ay op e ra t e r em ot e ly , t h e P E th r es ho ld ru l e s a r e i n a d equ a l e t o e st a b li sh ta x a bl e p r e s en c e of s u ch b u s in e ss e s i n a s ou r c e c oun t r y . R el yi ng on th e O EC D B EP S A c t i on pl a n 1, wh i ch w a s un d e rta k en t o c on sid e r th e ta x ch all en g es ra i s ed b y d ig it iz a t i on o f b u s i n es s e s, a n d t he la ck of in t e rn at i on a l c on s e ns u s on fr a m i n g n e w ta x ru l e s f or di gi ta l e c on om y, h e h e ld t h a t un d e r T a x T r ea ty f ra m ew o rk , t a x in g r ig h t is all oc at ed to the co nt ra cti ng s ta t es on the bn si s of c a t eg o ri z at i on / ch a r a c t e ri z a t i on of i nc o m e : A cti v e o r p a ss i v e i n c om e .
G en e ral l y , w it h r eg a r d t o p a ss iv e i nc o m e s u ch a s d ivi d en d , in t e r est , R ya l t y a n d F T S o r c a p il a l ga i n s , b ot h th e c on t ra ct in g st a t es h a v e rig ht t o t ax s u c h in c om e . H ow e v e r, in r e sp e ct o f a ct i v e i n com e ( bu si n es s in c o m e) , t he s ou r c e cou n t r y h a s a r i gh t t o ta x onl y w h en th e n on- r e s id en t h a s a P E in th a t s ta t e . Th e th r e sh o ld of P E u nd e r D TA A s an d " bu s in e ss c on n e ct i on " u n de r i n c om e- ta x A ct c o v e r s itu a t i on s w h e r e t h e bu si n e ss a cti v i t ie s of n on- r e s i d e nt sat i s fy " bu si n e ss in " c r it e ri a f o r e st a bl i s hi n g a ta xa b l e p r es e n c e in t h e s ou rce c oun t r y . R el y i ng on CI T V s V is a k ha p a t na m P o rt T ru s t ( 1 4 4 TR 1 46 ) , t h e A O h el d w h eth e r th e i n c om e t o b e ch a r a c t e riz e d a s a ct i ve bu sin e s s in c o m e o r pas si v e i n c o m e mu s t b e d e c i d ed on th e ba s i s o f deg r e e of i nv o lv e m en t in t h e a ct i vi t i es by t h e n on - r e si d en t ta xp a y e r in a s ou rc e c ou nt r y . In o rd e r t o ca t eg o r iz e c e rt a in in c o m e s t r ea m a s bu sin e s s in c om e i n th e h a n d s of n on - r e s id ent in a s ou rc e c ou nt ry , th e t a xpa y e r n e ed t o e xh ibi t t h a t h i s/h e r i n v ol v em en t is s u bs t a nt ia l. In ot h er w o rd s , th e n on - r e s id en t cr e n t e s a t a x a bl e p r e s en c e in a s ou rce c oun t r y on l y w h en it es t a bl is h e s a s ig ni fi c a nt / su bst a nt ia l e c on omi c c onn e c ti o n . T h e P E t h r es h o l d ru l es fo r ta xa ti on o f b u si n e s s pr o fi t s of n on- r e s id ent i n a sou r c e c ou n tr y i s b a s ed on th i s cri t e ri on .
7 ITA No. 2623/Del/2023GE Precision Healthcare LLC Ph y si ca l p r es en c e w it h c e rta in d eg r e e o f p e rm a n en ce o f a n on- r e s id ent o r d oin g a cti v it i es th r ou g h n d ep e n d en t p e r s on o r em p l o y e e s a r e c o n s id e r ed t o sa ti sf y th e su bs ta n ti a l e con om ic c onn e cti on i n a s ou r c e c oun t r y . H e a l so r el i ed on t h e d e ci s i on of th e Ap e x c ou r t in th e ca s e o f R D A g ra w a l ( 5 6 I TR 20 ,2 4 ), wh i ch l a id do wn t h e la w t ha t n on - r e s id ent i s sa i d to h a v e a b u si n e ss a ct i vit y i f th e r e ex i s ts a r e a l a n d i n ti m a t e r e l a t i on b et w e en t ra d in g a ct i vi t y c a r ri ed on ou t si d e t he t a xa bl e t e r ri t o ri e s a n d t ra d in g a c ti vit y w i th in th e t er r i t o ri e s . Th e l a nd ma rk ju d gm en t o f th e An dh ra P r a d e sh Hi gh C o u r t i n t h e c a s e o f GVK I n du st ri e s Ltd ( 2 28 I T R 56 4 ) wa s a ls o r eli e d u p on t o a r g u e th a t t o c on st it ut e a b u si n e s s a c ti v ity t h e r e mu s t be c on ti nu it y o f a ct iv i t y o r o p e r a t i on o f t h e n on - r e si d en t w i th th e In dia n p a rt y a n d a s tr a y o r is o l a t ed t ra n sa c t i on is n ot en ou gh t o c ons t it ut e bu s in e s s a ct iv i t y . He a l s o pl a c ed r el ia n c e th e A u th o rit y o f Ad v a n ce R u l in g in t he ca s e of H on e yw el l T e ch n ol ogi e s S A RL , w h e r e th e A AR , a f t e r r e f e r ri ng t o th e d e ci s ion s of t h e Hon 'b l e Su pr e m e C o u r t i n R .D . Agg a r w a l & C o. ( sup r a ) a n d i n A n g l o F r en c h T ext il e C o . Lt d . v . CI T ( 19 5 3) 2 3 L TR 1 0 1 (S C ) , su m m ed up th e es s ent i al f eatu r e s o f t h e b u si ne s s c on n e ct i on t hu s:
( a) a r eal a nd i nt im a t e r e l a ti on m u s t e xi st b et w ee n t h e t r adi ng ac t i vi t i es c a r ri ed on ou t s i d e I nd i a b y a n on - r e si de n t a n d th e ac t i vi t i es wi th in I n d i a :
( b) su ch r el a t i on , sh a l l c on t r ib ut e , di r e ctl y o r in di r e ctl y , t o th e ea rn in g of in c o m e by th e n on r e sid en t in h is bu sin e s s; a c ou rs e o f de a l in g o r c ont i n u it y of r el a t i on s hi p a n d no t a m e r e i s ola t ed o r st r a y n e xu s b et w e en th e b us in es s o f t h e n on - r e si d en t ou t si d e In di a a n d th e a cti vit y i n I n d i a , w ou ld fu rn i sh a st r ong in di c a t i on o f ' b u si n es s c onn e cti on ' i n I nd i a .
( c) a cou r s e o f d e a lin g o r c ont in u ity o f r el a t i on s hi p a n d n ot a m e r e is ol a t ed o r s t r a y n e xu s b etw e en th e b us in e s s of th e n o n- r e sid en t ou t sid e I nd i a a n d th e n et i vi ty in I n di a , w ou l d fu rn i s h a s t r ong in di c ati on of 'b u si n e s s c onn e cti on ' in I n d ia . H e a c c o rdi ng ly h e l d t h a t th e r e wa s u n a n im ou s vi ew t ha t r eg ul a rit y , c ont in u i t y , fr eq u en c y , v o lu m e a r e t h e ba s ic a tt ri bu t e s of a bu si n e s s ac t i vi t i es , t h e s e a tt ri b ut e s si gn i fy s u b st a nt ia l in v olv e men t of a ta xp a y e r . I n th e in s ta n t c a s e , th e t ra n s a ct i o n b et w e en t h e a s s e ss e e an d it s I n di a n A E d o e s n ot s a t i s f y t h e s e c rit e ri a . T hu s , he u rgu ed th at th e p r e s en t c a s e w a s th a t of "b u s i ne s s w i th " i n i nd ia a s a g a in s t " bu si n e ss i n" I n v i e w o f t h i s , co n si d e ra t i on t o b e r ec e i v ed b y th e as s e ss e e f r om Wi p r o- GF w a s n ot bu s i n e s s i nc o m e. H e a c co r di ng l y c onc l ud ed t h a t t h e t ra n s a c t i on w a s on e-t i m e a ffa i r . Mo r e o v e r, in c om e f r om t h i s a r ra ng e m en t w a s r e c ei v e d b y th e a s se s se e a t a fix e d p ri c e w hi c h is p r e d et e rmi n e d ( on a p e r- u se r p e r- m o nt h ba s i s) . Th es e t h e a t t ribu t e s of pa s siv e in c o m e . A s a g en e ra l rul e , th e c ha ra ct e r iz a t i on o f i nc o m e a s a c ti v e bu s in e s s i n c o me o r p a s s i v e 8 ITA No. 2623/Del/2023 GE Precision Healthcare LLC in c om e i s d e ci d ed on th e b a s i s of d e gr e e of in v ol v em en t i n th e ac t i vi t i es b y t h e n o n -r e s id en t ta xp a y e r in a s ou r c e c oun t r y. O n e of th e b ri g h t l in e t e s t s is th e q u a n tu m o f bu s in es s e xp en s e s. In th i s c a s e , ad m i tt edl y , t he a s s e ss e e h a s n ot in cu r r ed a n y bu si n e s s e xp en s es in I n dia . T hu s, a ll t h e sig ni f i c a nt fun c ti on s p e rfo rm ed , a s w ell as s ign i fi ca n t ri sk s un d e r ta k en w e r e o f fs et ont o th e In d ia n pa rt y an d t h e r e c eip t s t o th e a s s es s e e did n o t s a ti s fy th e t est s o f bu si n e s s in c om e d i s c us s ed a b ov e , a s l a i d d o wn b y va ri ou s c o u rt s . Th e bu sin e s s ri s k w a s d i sp r op o rti on a t el y b o rn e b y th e In di a n e nt it y an d th e c on s id e ra t i on r e c ei v a bl e b y t h e a s s e ss e e w a s a r etu rn on in v e stm ent in r es p e ct of s u b -l i c en si n g o f s o ft wa r e fr o m t hi rd p a rt i e s an d fo r w h i c h l i c en s e e xp en s es w o ul d a l s o b e b o ok e d by th e as s e ss e e i n it s t r a d in g a c c o un t y ea r- on- y ea r , if i t m a in tai n e d fin a n ci al sta t e m en t s - wh i ch i t did n ot . Th u s , t h e r ec e i pt s o f th e as s e ss e e a ri sin g fr om it s a g re e m ent w it h t h e In di a n A E w e r e n ot bu sin e s s i nc o m e a n d h en c e t h e c on t en t ion of th e a pp l i c a n t th a t i t s r e c eip t s f r o m t he s u b-l i c en si n g o f so ft w a r e w e r e i n t h e n a tu r e o f bu sin e s s i n c o m e w a s h e l d t o be n ot t en a b l e.
3 .8 Th e A O a l so di st in gu i sh e d th e r a t i o de ci d en di o f t h e Su p r em e C o u r t' s j u dg em en t i n En g i n e e rin g A n a l y si s C en t er o f E x c ell en c e v C IT on t he ba si s o f fa ct s a n d ci r cum sta n c e s . I n pa rt i cu l a r , h e a rgu ed th e argu m ent w a s n ot c ent e r ed a r o un d th e t ra n sf e r o f c op y ri g ht t o th e r e s id ent en d- u s e r , o r t h e r ep r od u ci bi li ty o f t h e s of tw a r e c on c e rn e d, bu t t h at o f u s e of s a i d c o py ri g h t ed s oft w a r e t ow a rd s o n a r e n tal bas i s , t o u s e t h e s oft w a r e t o p r ov i d e s e r oi c e s s ol d b a ck t o t h e as s e ss e e . H e a c c o rd i ng ly h e ld th a t p a y m en t f o r s u ch u s e w a s t a xa bl e u /s 5 6 o f t h e I n c o m e -t a x A ct a n d A r ti cl e 2 3( 3 ) of t he Ind ia - US A D TA A . A r t ic l e 2 3 of th e In d ia - US AD TA A . Th e Pa n el , th e r e f or e , fin ds n o in fi rm i ty i n th e o rd e r of th e A O . Th e s e o b j ec t i on s i s a c co rd in gl y di s mi ss e d. "
12. Further we have also gone through the comments of another member Shri Manvendra Goyal, which are repro duced below:
Comments of Member-3 of DRP-I Assessee had supplied so ftware to IB Indian affiliates for which it ha d rece ived 10,75,55,532/- , which the AO had added to the assessee income as income from other source . T he assessee has relied upon the following lega l agreements:-
Case-laws re lied upon by the Assessee 9 ITA No. 2623/Del/2023 GE Precision Healthcare LLC A. So ftware license fees is business income and not other income • JCIT (OSD) vs. Merrill Lynch Capital Marke t Es pana SA SV (112 taxmann.com 119) (Mumbai /TAT) • Ba ngkok Glass Industry Co. Ltd. VS. ACIT (34 taxmann.com 77) (Madras HC) • CS C Technology Singapore Pte . Ltd. v. ADIT (19 taxmann.com 123) (Delhi ITAT) • Husco Inter natio nal Inc. VS. ACIT (IT), (133 taxmann.com 196) (Pune /TAT) • Channel Guide India Ltd. vs. AC/T (25 taxmann.com 25) (Mumbai ITAT) • McKinsey & Com pany (Thailand) C o. Ltd. Vs. DDIT ( 36 taxmann.com 375) (Mumbai ITAT) B. So ftware license fees is no t royalty • DIT vs. Infrasoft Ltd. (2014) 264 CIR 329 • Engineering A nalysis Centre of Exce llence Private Limited vs. CIT (C ivil Appeal Nos. 8733- 8734 OF 2018) Any additional new case laws which the Assessee may like to re ly upon • ACIT V. Symantec Asia Pacific Pte . Ltd. (142 taxmann.com 455) (Delhi - Trib.) Tupperware India (P.) Ltd. v. A CIT (145 taxmann.com 187) (Delhi - T rib.) Co • GE Intelligent Pl atforms Asia Pacific Pte. L td. V. ACIT(139 taxmann.com 199) ( Delhi- Trib) The assessee he reby reserves the right to rely upon any additional case-la ws tha t comes to its attention during the course o f the proceedings befo re the Hon' ble Panel. From the details furnished it would appear that asse ssee had indee d furnishe d licensed software to its affiliates, the deta ils of whic h are as under:-10 ITA No. 2623/Del/2023
GE Precision Healthcare LLC S.No Softw are Licences Brie f description 1 Apttus CPQ Apttus Co nfigure Price Quote is a s ales tool that c an help quote complex and configurable products with e ase and consis tency.
2 Apttus CLM Contract Manage ment
solut ion e nds the era
of manual and
disiointed contract
processes, helping
legal teams drive
contr act complia nce
while reducing cycle
times, avoiding
bottlenecks,
improving nego tiation
outcomes &
eliminating errors &
risk
3 X-Arthur Designe r X-Autho r le ts you use
Microsoft Excel
native ly as a user
interface (Ul) fo r
tasks that nee d
Excel r ather than a
browse r Ul
4 Apptus Promo tion With the Promotions
Management Management
application, yo u can
now manage,
execute, and analyze
promotio ns using the
CPQ pro duc t line.
With the Promotions
Management
application,
marketing managers
can cre ate new
promotio ns, get
interal approvals fo r
such promotions, and
11
ITA No. 2623/Del/2023
GE Precision Healthcare LLC
roll these promotions
to their sales
channels .
5 SFDC Einstein Empower custo mer-
Analytics facing teams with
intelligent analytics
and predictions in
Salesto rce workflo ws
6 SFDc ELTON Used for info rmation
techno logy inve ntory,
tool tracking, spare
par ts, e valuation,
demonstration
equipment and
assets .
7 SFDC Chatter Plus The Chatter Plus
license is for users
who don' t have
Salesfo rce lice nses
but must have
access to Chatter and
some additional
Salesfo rce o bje cts.
Chatter Plus users
can be Chatter
moderators and have
access to standard
Chatter peo ple,
profiles, groups, and
files pages .
8 Oracle Variable Variable
Compensation Compensation is a
softw are related to
human resource
functio n that is used
to create and manage
multiple variable
compensation plans .
These plans can
encompass everything
from onetime ad hoc
awards to stock
optio ns, bonus plans ,
non-cas h incentives,
and ho liday gifts or
bonuses.
12
ITA No. 2623/Del/2023
GE Precision Healthcare LLC
Assessee draws attention to the le ading case of Engineering Analysis , the conclusio ns of which have bee n surmised by the assessee as follow s:-
The Hon' ble Supreme Cour t in the case of Enginee ring Analysis Ce ntre of Excellence (p) Ltd v. Commissione r of Income Tax (2021) (supra). The Supreme Court in the case o f Engineering Analysis (supra) drew the follo wing conclusions:
1. Where the Indian impor ters do not ac quire any copyright and/ or the right to sub-license , transfer, repro duce , etc., the so ftwa re and instead acquired non-
exclusive, non- transferable license to use the softw are, the tra nsaction is essentially sale of a physic al o bj ect whic h contains an embedded computer software, and is therefore, a sale o f goo ds.
2. R ight to re pro duce a compute r pr ogramme and e xploit the reproduction by sale , transfer, licence, etc ., is at the heart o f an exclusive right copyright. A no n-exclusive, non-transferable licence , merely enabling the use of a copyrighted product, is in the nature o f restric tive conditio ns, w hich cannot be construed as a lice ns e to enjoy all of the rights mentioned in section 14 o f the Copy right Act, or create an interes t in any such rights to attrac t sec tio n 30 of the Copyright A ct.
3. Mak ing co pies or adapting a co mputer programme to utilise this computer programme for the purpose for which it was supplied, or to make back- up copies as a temporary protectio n against loss, destruction or damage to utilise the compute r programme for the purpose for which it was supplie d, does not constitute an act o f infringement of copyright, a nd thus the conside ratio n for the s ame would not co nstitute royalty.
Now if the so ftw are sale s ( unde r license) were here to before tre ated as royalty- FTS the y could be made taxable business income- if the assessee had a P/E in India , o r could have been taxe d as ro yalty/ FTS depending upon certain facts of the case .
13 ITA No. 2623/Del/2023GE Precision Healthcare LLC Reference is made to the comments of Hon'ble Supre me Court in the above judgement, as under:-
154. From these positions taken, which use the language "reserves the r ight to " and is o f the view that some o f the payments re ferred to ma y constitute ro yalties", it is not at all cle ar as to what exac tl y the nature of these positions are. This may be contraste d with the c atego r ical language used by India in its positio ns taken w ith respect to other aspects (I ndia does not agre e to"), as follows:
"18. India does not agree with the inte rpretatio n that info rmation conce rning industrial, co mmercial or scientific experience is confined to o nly pre vio us experience ."
"20. India does not agree with the inte rpretatio n in par agraph 9.1 o f the Commentary on Article 12 accor ding to which a payment for transpo nder le asing w ill no t constitute roy alty.
This notion is contrary to the Indian positio n that inc ome from transpo nder leasing constitutes an e quipment royalty taxable both under India's domestic law and its tre aties with many countries. It is a lso contrary to India's pos ition that a pa yment fo r the use of a transponder is a payment for the use of a process resulting in a royalty under Artic le 12.
India also does not agree w ith the conclus ion inc lude d in the paragra ph co ncerning undersea cables and pipe lines as it conside rs that unde rsea cables and pipelines are industrial, commercial or scientific equipment and that payments ma de fo r thei r use constitute equipment royalties.
21. India does not agree w ith the interpretation in par agraph 9.2 o f the Commentary o n A rticle 12. It conside rs that a roaming call constitutes the use of a process. Acco rdingly, the payment made fo r the us e of that proce ss constitutes a royalty for the purpose s of Artic le 14 ITA No. 2623/Del/2023 GE Precision Healthcare LLC
12. I t is also the positio n of India that a payment for a reaming ca ll constitutes a ro yalty since it is a payment fo r the use o f industrial, commercial or scientific equipment.
22. India does not agree w ith the interpretation in par agraph 0.3 o f the Commentary o n A rticle 12, It conside rs that a payment fo r spectrum license cons titutes a ro yalty ta xable both under Indi a's domestic law and its treaties wi th many countries." ( Po sitions on Article 12, OECD Commentary 2014)
155. In DIT V. New skies Satellite BV [20161 68 taxmann.com 8/28 Taxman 577/382 ITR 114 3A, ' New Skies Satellite"), a Divisio n Be nch of the High Co urt of Delhi correctly o bserved that mere positions taken with respect to the OECD Commentary do not alter the DAA's provisio ns, unless it is actually amended by way of bilate ral re-nego tiatio n. This was put thus:
"68. On a final note, India's change in position to the OECD Commentary cannot be a fact that influences the interpreta tio n of the words defining royalty as the y s tand today. T he o nly manner in which such change in pos ition can be re levant is if such change is incorpo rated into the agreement itself a nd not otherwise . A change in e xecutive position cannot bring abo ut a unilateral legislative amendment i nto a treaty co nclude d be tween two sovereign sta tes, It is fallacious to assume that any change ma de to domestic law to rectify a s ituation of mistaken inter pretation can spontaneously further their case in an international treaty, The refo re, mere amendment to Section 9( 1)(v i) cannot res ult in a change. It 18 imperative * that such amendment is brought about in the agreement as well. Any atte mpt s hort o f this , even if i t is e vidence o f the S tate's dis comfort at letting data broadcast re venues slip by , will be insufficient to persuade this Co urt to hold that such amendments are applicable to the DTAAs."
156. It is significant to no te that afte r India took such positions qua the OECD Commentary, no bilateral amendment w as made by India and the other Co ntracting 15 ITA No. 2623/Del/2023 GE Precision Healthcare LLC States to change the definition of r oyalties contained in any of the DTAAs that we are concerned with in these appe als, in accor dance with its po sition. As a matter of fac t, DTAAS that were amended subsequentl y, such as the Conventio n between the Republic o f I ndia and the Kingdom o f Morocco for the A voidance of Double Taxation and the Preve ntio n o f Fiscal Evasio n with res pect to T axes On Income,47 ["India-Morocco DTAA", which was amended o n 22-10-2019,48 incorpo rate d a de finition of royalties, not ve ry diffe rent from the definitio n contained in the OECD Model Tax Co nvention, as fo llo ws:
"The term " royalties" as used in this Article means:
(a) payments o f any kind received as a conside ratio n fo r the use o f or the right to use , any copyright of a lite rar y, artistic or scientific work, including cinematograph films or reco rdings on any means o f re produc tio n fo r use for radio or televisio n broadcasting, any patent, trade mark, design or model, plan, computer software pro gr amme, secret fo rmula or process, o r fo r informatio n co ncerning industrial, commer cial or scientific e xperience; and
(b) pa yments of any k ind received as consideratio n fo r the use of, o r the right to use , any industrial, commercial or sc ientific equipment"
157. S imilarly, though the India-S ingapore DTAA ca me into force on 8-8:194, it has been amended several times, including o n 01-92201,9 and 233-2017, 9 Ho wever, the definitio n o f "roy alties" has been retained without any change s,. Likewise, the Conve ntio n betwee n the Government of the Republic of India and the Go vernment of Ma uritius fo r the a voidance of Double Taxation and the Prevention o f Fiscal Evasion with respec t to T axe s on Income and Capital Gains a nd for the Encouragement of Mutua l Trade and Investment, ["India-Mauritius DTAA"
was ente red into on 6-12-1983, and w as amended subsequently o n 10- 8-2016, 52 witho ut mak ing any change to the definition of "royalties"16 ITA No. 2623/Del/2023
GE Precision Healthcare LLC
158. It is thus cle ar that the OECD Commentary on Ar tic le 12 of the OECD Model Tax Convention, incorpo rate d in the DTAAs in the cases before us, will continue to have persuasive value as to the inte rpretatio n of the term " royalties"
contained therein.
159. V iewed from a nothe r angle , persons who pay TDS and/o r assessee in the natio ns governed by a DTAA have a right to kno w exactly w here they s tand in respect of the treaty prov isio ns tha t gover n them. Such persons and/or assessee ca n thus place re lianc e upon the OECD Commentary for provisio ns of the OEC D Model Tax Conventio n, which are use d without any s ubs tanti al change by bilate ral DTAAs, in the absence of judgments of municipal courts clarfying the same, or in the e vent of conflicting munici pal decis ions. From this po int o f view also, the OECD Commentary is significant, as the Contracting States to which the perso ns deducting tax/ assessee be lo ng, can conclude business transacti ons on the basis that they are to be taxe d e ither on income by way o f royalties for parting with copyright, o r income derived from license agreements which is the n taxed as business profits depending o n the e xis tence of a PE in the Contracting Sta te.
........
........
164. The lea rne d Additional Solicitor Gener al then referred to the judgment o f this Co urt in Commissio ner of Customs v. G.M. Expo rts [ 2015] 62 taxmann.com 184 (SC, and in particular on the four propositions that w ere culled out in the context o f the le w of an anti-dum ping duty in consonance with the Ge neral Agreement on Tariffs and Tra de (GATT), 1994, as follows:
"23. A conspectus of the afo resaid authorities would lead to the follow ing co nclusions:
(1) Article 51(c) of the Constitution of India is a directive principle o f Sta te policy which sta te s that the State s hall endeavour to foster respect for international law and treaty obligations. As a result, rules of international law whic h are not co ntrar y to domestic law are followed by 17 ITA No. 2623/Del/2023 GE Precision Healthcare LLC the courts in this country. T his is a s ituation in which there is a n internatio na l treaty to which India is no t a signato ry or gene ral rules of inte rnatio nal law are m ade applicable. It is in this situation that if there happens to be a conflict between domestic l aw and inte rnatio nal law, domestic law will prevail (2) In a situation where India is a signatory natio n to an internatio nal treaty, and a statute is passed pursuant to the sa id treaty, it is a legitimate aid to the cons truction of the provisio ns of such statute that are vague or ambiguous to have.recourse to the terms of the treaty to resolve such ambiguity in favo ur of a meaning tha t is consis tent with the pro visions of the tre aty.
(3) In a situation where India is a signatory natio n to an internatio nal treaty, and a statute is made in furthe rance of such treaty, a purposive ra the r than a narrow literal constr uction of such sta tute is prefe rre d. The interpreta tio n o f such a statute should be construed on broad pri nciples o f gene ral acceptance rather than earlier domestic precede nts, being inte nded to carry o ut treaty obligations, and not to be inconsistent with them .
4) In a situatio n in which India is a signato ry nation to an intemational treaty, and a statute is made to enforce a treaty obliga tion, and if there be any difference between the language of such statute and a corresponding provisio n o f the treaty, the statutory language sho uld be constr ued in the same sense as that of the treaty. This is for the reason that in such cases what is sought to be achie ved by the inte rnatio nal treaty is a unifo rm internatio nal co de of law which is to be applie d by the courts of all the signator y nations in a manne r that leads to the same result in all the signato ry nations."
167. The Revenue , therefore , when r eferring to " royalties"
under the DAA , makes a distinctio n be tween such royalties, no doubt in the context of technical services, and remittances fo r supply of computer softw are, which is then trea ted as business profits , taxable under the 18 ITA No. 2623/Del/2023 GE Precision Healthcare LLC relev ant DTAA de pending upon w hether there is a PE thro ugh which the assessee ope rate s in India. This is one more circumstance to sho w that the Revenue has itself appreciated the differe nce betw een the payment of royalty and the supply/use o f com pute r so ftware in the form o f goods, which is then treated as bus iness income of the assessee taxable in India if it has a PE in India.
CONCLUSION
168. Given the definition o f royaltie s containe d in Ar ticle 12 o f the DAAs mentioned in paragraph 41 o f this judgment, it is clear that the re is no o bligation on the persons mentione d in section 195 of the Income-tax Act to de duct tax at so urce , as the distributio n agreements/EULAs in the facts o f these c ases do not create any intere st or r ight in s uch distributors/e nd- users , which would amount to the use of o r right to use any copyright. T he provisions co ntained in the Income-tax Act (section 9( 1)(v), alo ng with e xplanations 2 and 4 thereo f), which deal with royalty, not being m ore beneficial to the assessee, have no application in the fac ts of these case s.
169. Our answer to the question po sed before us , is tha t the amounts paid by resident Indian end-
users/distributors to nonreside nt compute r so ftware manufacturers/supplie rs, as consideration fo r the resale/use of the computer software through EULAs/ distr ibutio n agreements, is not the payment of royalty for the use of copyright in the computer so ftw are, and that the s ame does not give rise to any income taxable in India, a s a result of w hich the persons re ferred to in section 195 of the Income-tax Act we re not liable to deduc t any TDS under section 195 of the income-tax Act. The answe r to this questio n will apply to all four catego ries of cases enumer ate d by us in paragraph 4 of this judgment.
170. The a ppeals from the impugned judgments o f the High Cour t o f K ar nataka are allowed, and the afores aid 19 ITA No. 2623/Del/2023 GE Precision Healthcare LLC judgments a re se t aside. The ruling of the AAR in Citrix Systems (AAR) (supra) is set aside. The appeals from the impugne d judgments of the High Co urt of Delhi are dismisse d."
Decis ion The prima facie view would be that the judgment of S C in the case o f M/s Engine ering Analysis Ce ntre o f Exce lle nce ( p) Ltd v. Commissioner of Income Tax (2021) , would be applicable to the appe llant and hence the amount paid fo r the user of software purc hase d under the license wo uld not be taxable a per the judgement given a bove.
Attention of AO a nd the concerned CIT (Int. T ax.) is invite d to section 150(1) of the I .T. Act 1961, as pe r which, the AO would be a ble to reassess the income of and to give effe ct to any direc tio n of any co urt. He nce, In cas e the judicial views were to change in favo ur of reve nue regar ding the matte rs dealt with, the same may be given e ffect to by an appro priate actio n to protec t the interests of the reve nue .
In give n facts the treatment of these as income from other sources does not seem proper. As there has been no findings of P/E the re canno t be ta xed as income of P/E. Fo llowing the ruling given Hon'ble Supreme Court in the case o f Engineering Analysis & keeping in mind of article 141 o f the Co nstitution o f India, in my humble view it would appear that
a) That income re quired from provisio n of software services canno t be in absence of facts) income from other sources has to be taxed as business Income.
b) Following Supreme Court J udge ment, the same would also not be taxable as royalty.
13. The other member of the ld. DRP Shri Goyal held that, the judgment of Hon'ble Apex Cour t in the case of M/s Engineering Analysis Centre of Excellence (p) Ltd v. Commissioner of Income Tax (2021), would be applicable to the facts o f instant case and this direction of the ld. DRP is found to be correc t. The endeavor of the Assessing Officer and the ld. DRP to distinguish 20 ITA No. 2623/Del/2023 GE Precision Healthcare LLC the ratio decidendi of the judgment of Hon'ble Apex Court is witho ut any ta ngible basis.
14. Further we have also find that the similar issue has also been adjudicated in the case of the asse ssee by the coordinate bench of the Tribunal in ITA No. 404/Del/2023 dated 14.08.2023. For the sake of ready reference their relevant part of the said order is reproduced as below:
16. On going through the aforesaid reasonings of the Assessing Officer, it is very much clear that the Assessing Officer has accepted the position that the assessee buys software licenses from third party vendors and sublicenses them to its affiliates. He has also observed that by using the sublicensed software the affiliates carry on their business activity and generate income from services provided to the assessee. From the aforesaid observations of the Assessing Officer, two facts are very much clear. Firstly, the assessee is not the owner and manufacturer of the software, and secondly, the licenced softwares are used as business tools by the affiliates to generate service income from the assessee. If that is the case, we fail to understand how the receipts from sublicensing of softwares can be treated as other income under section 56(1) of the Act and Article 23(3) of the tax treaty. It is established on record that the assessee has not sublicensed standardized software licenses on standalone basis.
The details of software licenses sublicensed by the assessee to its affiliates and their functionality are described as under:
S. N o So ft w a r e Br i ef d e s c r ipt i on
Li c en c e s
1 A pt tu s C P Q Ap tt u s C on fig u r e
Pr i c e Q u ot e is a
sales t o ol that
can h elp q u ot e
c omp l ex an d
21
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GE Precision Healthcare LLC
c onf i gu ra b l e
pr odu ct s w ith
ea s e an d
c ons i st en c y .
2 A pt tu s C LM Co nt ra c t
Ma n a g em en t
s olu ti on en d s th e
e ra of man u al
and d i si o in t ed
c ont ra ct
pr o c e ss e s ,
h el pi n g l eg a l
te a m s d r iv e
c ont ra ct
c omp li a n ce w hi l e
r edu cin g cycle
ti m e s, a v o i d in g
bot t l en e ck s ,
im p r ovi n g
n eg ot i a t i on
ou t c om e s &
eli mi na tin g
e r r o rs & r is k
3 X -A rth u r X- Au t h o r l et s y ou
D e si gn e r use Mi c r os o ft
E xc e l n a t iv el y a s
a user in t e r fa c e
( Ul) fo r t a sk s
th a t n e e d
E xc e l ra t h e r t ha n
a b r o ws e r Ul
4 A pp tu s W it h th e
Pr o m oti on Pr o m oti on s
Ma n a g em en t Ma n a g em en t
22
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GE Precision Healthcare LLC
a pp li ca ti on, y ou
c a n n o w m a n ag e ,
e x ecu t e, an d
a n a l yz e
pr o mo t i on s u sin g
th e C P Q p r odu c t
li ne . Wit h th e
Pr o m oti on s
Ma n a g em en t
a pp li ca ti on,
ma rk et in g
ma n a g e r s ca n
c r ea t e n ew
pr o mo t i on s, g et
in t e r a l a pp r o v al s
f or s u ch
pr o mo t i on s, and
r ol l these
pr o mo t i on s to
th ei r sa l e s
c ha n n e ls .
5 S FD C Ei n st ei n Em p ow e r
An a l y ti cs c u st om e r- fa ci ng
te a m s w ith
in t e lli g en t
a n a l yt i c s an d
pr ed ic t i on s in
Sa l e s t o rc e
w o r k fl o w s
6 S FD c EL TO N Us ed for
in f o rm a ti on
te ch n ol og y
in v en t o ry , t o ol
tra ck i ng , sp a r e
23
ITA No. 2623/Del/2023
GE Precision Healthcare LLC
pa rts ,
e va lu a t i on ,
de m on s t r a t i on
equ ip m en t and
a s s et s.
7 S FD C C h a tt e r Th e C h a tt e r Pl u s
Plu s li c en s e is for
u s e rs who don't
have Sa l e s fo r c e
li c en s e s bu t mu st
have
a c c e ss t o C h att e r
and s om e
a dd it i on a l
Sa l e s f o r c e
obj e ct s . C h a tt e r
Plu s u s e r s ca n b e
C ha t t e r
mo d er a t o r s and
have a cc es s to
s ta n da rd C h att e r
pe op l e, p r ofi l es ,
gr oup s , a n d fi l e s
pa g e s .
8 O ra cl e V a ri a b l e Va ria b l e
C o mp en sa t i o n C o mp en sa t i o n is
a s o ft w a r e
r ela t ed t o h u man
r e s ou rc e fu n ct i on
th a t is u s ed to
c r ea t e and
ma n a g e mu lt ip l e
va ria bl e
c omp en s a t i on
24
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GE Precision Healthcare LLC
pl a n s. These
pl a n s ca n
en c om p a ss
e v er yth i n g fr om
on eti m e ad hoc
a w a rd s to st o ck
opt i o ns , b on u s
pl a n s, n on- c a sh
in c ent i v e s, an d
h oli da y g i ft s or
bon u s e s.
17. From the description of the software licences sublicensed to the affiliates, it is very much clear that the sublicensed softwares were meant to be used by the affiliates in their day-to-day business activity of healthcare, which is the business of the entire group. Therefore, it cannot be said that the receipt from sublicensing of software is not in course of assessee's business activity, hence, cannot be characterized as business income. Further, from the details available on record, it is observed that sublicensing of software is not an one off activity but an activity carried on with regularity, continuity and frequency. Therefore, in our view, it cannot be treated as a passive activity.
18. Reverting back to the issue, whether the receipts can be recharacterized as other income as envisaged under section 56(1) of the Act and Article 23(3) of the Act, it is very much clear, as per the provisions of domestic law, an item of income, which does not fall under any specific heads of income, such as, salary, house property, business and profession and capital gain, will fall under the residuary head 'income from other sources' as per section 56(1) of the Act. Similarly, Article 23(3) of the tax treaty provides for taxation of residuary items of income which are not dealt with in the other Articles of the tax treaty. In the facts of the present appeal, admittedly, the item of income sought to be taxed is the receipts from sublicensing of software licences. Therefore, ordinarily, the income can be characterized as royalty under section 9(1)(vi) of the Act and Article 12 of the DTAA. In case, it is not taxable as royalty income, it can be treated as 25 ITA No. 2623/Del/2023 GE Precision Healthcare LLC business income under Article 7 of the tax treaty. Thus, to our understanding, the residuary provision under Article 23 can come into play when an item of income is not expressly dealt with in other articles preceding article 23 of the tax treaty.
19. Characterization of an item of income under a particular Article is different from taxability of that income under the said Article. A particular item of income can fall either under Article 7 or Article 12. However, their taxability under these articles is subject to fulfillment of conditions enumerated therein. If the particular item of income falling under these articles is not taxable due to non-fulfillment of the conditions mentioned therein, it cannot automatically be re-characterized as other income under Article 23 of the tax treaty. In other words, the residuary provisions of Article 23 will not apply to items of income, which can be classified under other provisions of the tax treaty, but their taxability is subject to fulfillment of conditions mentioned therein.
20. In the facts of the present appeal, to our understanding, the receipts in dispute could have been characterized either as royalty income falling under Article 12 or business income under Article 7 of the tax treaty. However, in view of the ratio laid down in judicial precedents, the income is not taxable as royalty. Alternatively, it could have been taxed as business income under Article 7 of the tax treaty. However, in absence of a PE, it cannot be taxed in India. Thus, in our view, the income in dispute, since can be classified under other Articles of the tax treaty, they cannot be brought under the residuary provision contained under Article 23 of the tax treaty. In this context, we are supported by the decisions cited before us by learned counsel for the assessee. Therefore, we conclude that the income cannot be treated as other income under Article 23(3) of the tax treaty. The only provision under which it could have been taxed is as business income under Article 7. However, in absence of a PE in India, it cannot be taxed under that provision as well. Therefore, we direct the Assessing Officer to delete the addition.
15. Having gone through the material on record, directio ns of the two members of the ld. DRP affirming the action of the Assessing Officer in the draft Assessme nt Order, the directions of the other member of the ld. DRP directing that no taxability 26 ITA No. 2623/Del/2023 GE Precision Healthcare LLC arises, keeping in view the order of the coordinate bench of the Tribunal in the assessee's own case and keeping in view the judgment of Hon'ble Apex Court, we hold that the amount received on a ccount of sublicensing of standardized software is not liable to tax.
16. In the re sult, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 17/01/202 4 Sd/- Sd/-
(Saktijit Dey) (Dr. B. R. R. Kumar)
Vice President Accountant Member
Dated: 17/01/2024
*Subodh Kumr, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR