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The above appeals are all by the revenue against the orders passed by the Income Tax Ap'pe11ajte Tribuna}. Bangalore Bench, where had aliowed the appeals fiied by _different resid'_ent "~n it assessees in respect of different assessmeIit._ flby hoiding that the resident -~ Iiahleffor deduction of any part of the to noI1--resideIit for the software which asfsessees had acquired/purchased' "n_on;residents for the purposes of of the resident --

assessees " the of the nature of their liah'ilit3f/ohiigatiorr:under the provisions of section 195 of jathe [for short 'the Act') by holding the "payments were not in the nature of within the meaning of section 9[1][Vi] of if " A Act it is not royaity it is not income and if it was VV._"I}.;Otui}'VlV(5V(a'I1'}T}(3 in the hands of the non--residerit assessees it V * i1f1(to1'nc" is"*£'é::_ll2'1t'*i.€'jL1$1= Ellfld 1101" s141s¥.ai1'1al;)lc:. 'V I,<:»'a_1'i1r;.ci'_c0unseI for t.1'1c7 assessees I'1ave (>oI1t.ended .1 in' !..Ij;..«r>.§sé*..ay1p1:>e'als 1.1m: thxa rzamlre of }")E1yIT1(".']'"l1 is not V" $u:;>y--«-;x1:-;y*: ex.-'e1'1 witiain H16 H1e2u'1i1'1g zmd scope of secti01'1 4'2 A\='oic.i:;.1.11C<:é A_.§_{:'(*c:11t'1'1£.s [for short" 'I)'.I'AA'E (=?111.er<>c1 irzto with sc=\='cra1 C(.>11m.ri('rs alui :'c:l<:v21.11t" for 1.119 purpose of ('EEC'}"J, ;)z:1yme1"11' .

8. Whether the Tribunal was correct in holding that since the assessee had purchased only a right to use the copyright i.e. the software and not the entire copyright itself, the payment . cannot be treated as Royalty as per the l Double Taxation Avoidance Agreement"-._V L"

and Treaties which is beneficial to --the'*- . assessee and consequently sect£on._9<.of' i the Act should not 'take"rt.'i'iniio consideration. . l

9. Whether the Tribunal .=toa;s'r..'jco'rrect in"

holding that the payr_ne=nt ._the character of purchase anfd"sale..Ofgoods and therefore carirzotf b'e._"»,trea;texd_ 615 royalty liable-to IncofiL8.T¢'x- "

the 1'.'a(?i*. whether it is 'shrin}{¥"v§ifei;3psd*" ~.9(>:'i~' shelf/brzinded software' urfiiL:»}1 and gone into. Si"i.SV(1s1121c%lri,;1_1§i. 12 and 13 of DTAA zmci points 01.11: tliat thq in this regard is oftwo fold: 9 V H

(i) AVs§)fi,\iréi1*eV_:isw 7go<A$'tl9sV""'é:ii1d it does not find a place " V .. 'ii 1'15..A'i7;)"l 21g1'€1éfii{? 11 L s{.ii'V} 'i<5ts3i1'{_%.1'wise defiiiition urider Section I2

i)'I".A~,?3_i9'4j'..'i'(A)r royalty the word software. is not rfie.i'ii.i()11eci.

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Sri.Seshacha1a has formulated the foliowing points for addressing the arguments.

(i) the assessee was bound to deduct tax Section 195 of the Act and he cannot that it is not the income of the recipient';-._:: v ' Vt" '

(ii) The payment is covered by~'S'ection the Act.

[iii] The Tribunal did not c_onsi'cie_r"

assessee can questionzfihthe of recipient under Sectionsi2'U'iVc{'i]uVand 20 i'['1A}i
(iv) Software is a to tax under Sectiohn and relies upon in "the_4'cas'e"ofifransmission Ci;orpo_ration__ VS.'. won" (1999) 239 ITR 587V(scj at 'paragraph..--8.