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4. Grossly erred in concluding that QTI grants a right to use copyright to the telecom operators under the BREW Operator agreement and by disregarding the fact that the telecom operators are not permitted to make copies under the BREW agreement except for the purposes of back-up and archival.
5. Erred in not following the principles of judicial discipline and disregarding the judgement of the jurisdictional Hon'ble ITAT in the case of QUALCOMM Incorporated on similar facts.

Ground No.3 Erroneous initiation of penalty under section 271 (1) ( c) of the Act.

8. Erred in confirming the action of the Assessing Officer for initiation of penalty proceedings under section 271 (1) (c) of the Act.

3. Facts of the case, in brief, are that the assessee is a company incorporated in United States of America and is a wholly owned subsidiary of Qualcomm Incorporated USA(Qualcomm). QTI is engaged in the business of design, development and marketing of digital wireless telecommunications products and services based on Code Division Multiple Access (CDMA), Orthogonal Frequency Division Multiple Access(OFDMA) and other technologies. During the year, QTI has provided services to M/s. Sohamsaa Systems Pvt. Ltd. (Sohamsaa), Sistema Shyam Tele Services Ltd. (Sistema), Tata Tele Services Ltd (TTSL), Virgin Mobile India Ltd. (Virgin Mobile) and Alcatel Lucent India Ltd. (Alcatel). 3.1 The assessee filed its return of income on 30.09.2013 declaring nil income. However, the assessee company offered an Page | 3 income of Rs.44,46,767/- as royalty taxable at special rate of 10% as per IT Act 1961. The assessee company has revised its return of income on 31.03.2015 at the same income but the claim of TDS was raised from Rs.17,36,237/- to Rs.19,41,897/-. 3.2 During the course of assessment proceedings the assessee vide letter dated 12.2.2016 explained as under :-

"Effective as of October 1, 2012 QUALCOMM incorporated completed an internal corporate reorganization, and in connection with the internal corporate reorganization Qualcomm transferred the assets relating to certain of its businesses to its wholly- owned subsidiary Qualcomm Technologies, Inc. The Qualcomm Internet Services'(QiS) division is now part of QTI. As a part of this transfer, QIS sent notice of assignment letters to its BREW customers, including Sistema Shyam Teleservices Limited and TATA Tele Services Limited. As a result of this assignment, we confirm, for the period of October 01, 2012 to March 31, 2013 (the applicable part for A.Y 2013-14) that:
• The BREW agreement is being operated with the telecom operators (e.g, Sistema Shyam Teleservices Limited and Tata Teleservices Limited) under the same terms and conditions as were existent with Qualcomm.
• Ail risks, rewards, rights and obligation under the BREW agreements are vested with QTI on the same Page | 4 terms and conditions as were existent with Qualcomm. "