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"In this case Dart is not purchasing software in bulk to have economy of scale and transferring the same to AEs but is purchasing software and related hardware and is creating an infrastructure of hardware and software. The AEs are enabled to use the infrastructure of software and the related hardware. Even fair and transparent allocation of charges for use of software is not possible without such infrastructure. Further JD Edwards is an ERP software which needs high level of customization before it can be used by any enterprise. If the assesee is using JD Edwards software it must have been customized for it and Dart must have done that. Similarly, Dart is not buying internet hours from a service provider and allocating it to AEs but has created a platform for the AEs to use its Internet system. Clearly the payment for such services is covered under Article 12 and Explanation 2 of section 9(i)(vi) of the Act. The AO was right in holding such payment to be payment for royalties.

22.2 On the other hand, the Ld. DR submitted that the Apex Court's decision in Engineering Analysis Centre of Excellence Private Limited (supra) will not be applicable in the present case as the software supplied to the assessee is customised software/custom made whereas the Apex Court's decision has been rendered in the context of the standard software.

23. We have heard the Ld. Representatives of the parties and perused the material available on record and the judicial precedents relied upon. The facts placed on record with the Ld. AO are that during AY 2013-14 the assessee made reimbursement on account of various expenses inter alia including software charges incurred by the group companies on behalf of the assessee on cost to cost basis without any mark-up. The impugned disallowance of Rs. 46,29,269/- under section 40(a)(i) pertain to software charges of Rs. 13,62,384/- and intranet and IT related charges Rs. 26,66,885/- paid to Dart Industries Inc. USA under an agreement with vendors like JD Edwards, Microsoft Inc. for the purchase of standard software to be used by Tupperware group entities across the globe. The cost of purchase of such software has been allocated amongst various group entities based on allocation key of number of licenses used in each group entity. The said allocation was made at cost and no mark-up was charged. All the group entities including the assessee had reimbursed their share of cost to Dart. The copy of the invoices placed by the vendors on Dart (on sample basis) and allocation key was placed on record before the Ld. AO. Explaining the nature of the software the assessee explained that JD Edwards is an accounting package which offers a holistic enterprise solution, helping organisations manage their business processors, including financials, sales, expenses, etc. 23.1 As against the explanation offered by the assessee that the software supplied to it is a standard/off-the-shelf software, the allegation of the Ld. AO/DRP is that JD Edwards is an ERP software which needs high level of customization before it can be used by any enterprise and hence it must have been customized for the assessee as well by Dart. Therefore, the Revenue has contended that the decision of the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence P. Ltd. (supra) cited and relied upon by the assessee is not applicable to the facts of the present case which case applies to the payments made for standard/off-the-shelf software and not customized software as in the case of the assessee.

24. The issue whether the software supplied by Dart to the assessee is standard/off-the-shelf software or customized software needs verification in the light of observations made by the Hon'ble DRP. We, therefore, deem it fit to restore this issue to the file of the Ld. AO for verification. Needless to say, the assessee will be given adequate opportunity of hearing before the Ld. AO. If, on verification it is found that the software supplied by Dart is standard software without any customization being done by Dart, the Ld. AO shall reconsider this issue in light of the decision of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence P. Ltd. (supra) and modify the assessment accordingly.