LARSEN & TOUBRO LIMITED Vs. INCOME TAX OFFICER (INTERNATIONAL
LAWS(IT)-2014-5-42
INCOME TAX APPELLATE TRIBUNAL
Decided on May 13,2014

Appellant
VERSUS
Respondents

JUDGEMENT

- (1.) THIS appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) -Gandhinagar ('CIT(A)' for short) dated 31/12/2012 pertaining to Assessment Year (AY) 2008 - 09. The Assessee has raised the following grounds of appeal: - The appellant being dissatisfied with the order passed by the Commissioner of Income Tax (Appeals) - Gandhinagar, (Learned Commissioner), prefers a appeal against the same on the following amongst other grounds, which are without prejudice to each other. 1. The order passed by the learned Commissioner of Income Tax (Appeals) is erroneous and contrary to the provisions of law &facts and therefore requires to be suitably modified. It is submitted that it be so done now. 1.1 The order passed by the learned Commissioner is not a speaking order as none of the contentions of the Appellant have been dealt with while rejecting them and adjudication has been made solely based on a case law in which facts were different as also Appellant's contentions were not dealt with. It is submitted it be so held now.
(2.) LEARNED Commissioner has erred in upholding the learned AO's decision to consider the appellant to be assessee in default u/s. 201(1) of the Act and subject to interest u/s. 201(1A) of the Act. It is submitted it be so held now. 2.1 Learned Commissioner has erred in disregarding the contentions that appellant has not made payment of any income chargeable to tax in India and therefore the question of deducting tax at source u/s.195 of the Act does't arise. It is submitted it be so held now. 2.2 In the facts and circumstances of the case the payment made by the appellant are of nature of business income in the hands of the recipients and in absence of existence of business connection/Permanent Establishment of the recipients in India the Income is not chargeable to tax in India. It is submitted to be held so now.
(3.) THE learned Commissioner has erred in upholding the order of learned Assessing officer considering the remittance made by the appellant towards purchase of computer software as Royalty payment falling within the definition of "Royalty" u/s.9(1)(vi) of the Act. It is submitted that it be so held now. 3.1 Learned Commissioner has erred in not following the Hon'ble Supreme Court decision in case of Tata Consultancy Services v. State of Andhra Pradesh (2004) 271 ITR 401 wherein Hon'ble Court has clearly held that transaction of sale of computer software packages is clearly a sale of goods. It is submitted it be so held now. Without prejudice to any other ground, Appellant cannot be held to be an assessee in default u/s.201&201(1A) of the Act in view of the retrospective amendment of the Act u/s.9(1)(vi) of the Act vide Finance Act, 2012. It is submitted it be so held now. 4.1 Without prejudice to any other ground, Learned Commissioner has erred in not considering that even after the amendment, the definition of Royalty under the relevant DTAA is narrower in scope compared to the same under the Act and the DTAA definition does not cover payment made by the Appellant within its ambit. Learned Commissioner has failed to appreciate that the Hon'ble Karnataka HC decision in case of Samsung Electronics, solely relied upon by him, does not deal with the said issue. 4.2 Learned Commissioner has failed to deal with Appellant's contention that I certain DTAAs signed by India (Malaysia, Morroco, Nambia, Russia, Trinadad, etc.), the definition of royalty categorically includes consideration paid for 'use of computer software'. In absence thereof in the DTAAs in the facts of Appellant's case, the payments towards purchase of computer software cannot be classified as royalty even under DTAAs.;


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