CASE LAWS

2016-TII-122-ITAT-MUM-INTL

DDIT Vs RELIANCE INDUSTRIES LTD: MUMBAI ITAT (Dated: May 18, 2016)

Income tax - Sections 9(1)(vi), 40(a)(i), 90 & 195 - Indo USA DTAA - Article 12

Keywords - acquisition of copyright - business income - license to use - purchase of software - royalty - payment to foreign resident - use for business purpose & withholding tax liability

Whether consideration paid by an Indian resident assessee to the residents of Foreign States on account of purchase of certain software for internal use in its business, is liable to be treated as business income of the foreign supplier of the software, not taxable in India, in case no 'use of' or 'right to use' the copyright in such software has been transferred - YES: ITAT

Whether any disallowance u/s 40(a)(i) is warranted for not deducting TDS on such consideration, where as per the existing law which was in operation at the time of purchase of software, the assessee was under bonafide belief that there was no liability to deduct tax in respect of the consideration paid for purchase of software - NO: ITAT

Whether amendments made to domestic law can be read into treaty provisions without amending the treaty itself - NO: ITAT

Whether the term 'literary work' as mentioned in the definition of royalty in the DTAAs, would include 'software' as well - YES: ITAT

Whether the sale of software can be said to be sale of 'Goods' - YES: ITAT

Revenue's appeal dismissed; Assessee's appeal allowed

2016-TII-28-HC-P&H-TP

PR CIT Vs ITW INDIA LTD: PUNJAB AND HARYANA HIGH COURT (Dated: April 23, 2016)

Income Tax - Sections 80HHC, 80IA, 80IB, 92CA(3), 127, 143(3), 154 & 260A.

Keywords - export - manufactured goods - TP adjustments - industrial unit - commission payments - AE - finished goods.

Whether when the initial process of assessment was initiated at Hyderabad and the final assessment was also framed there, the court of a different location lacks territorial jurisdiction to adjudicate the matter upon the lis over an order passed by the Assessing Officer - NO: HC

Revenue's appeal dismissed