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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
This appeal filed by the Revenue is preferred against the order of the CIT(A)-43, New Delhi dated 12.02.2016 pertaining to A.Y. 2010-11.
The grievance of the revenue read as under :-
None attended on behalf of the assessee inspite of notice, we decided to proceed exparte.
The DR was heard at length. Case record carefully perused.
Ground No.2 as mentioned above is in itself sufficient to dismiss this appeal but for the sake of completeness we will consider the facts in brief.
The assessee company is involved in designing and providing fully tailored off the shelf wireless broadband solutions throughout the USA and a few other countries in Africa. During the year under consideration the assessee company sold “off the shelf” software through a non-exclusive license rights to the Zylog systems (India) Ltd. to utilize the technology in certain areas in India.
During the course of the scrutiny assessment proceedings the assessee was asked to show cause as to why receipt from granting of license should not be treated as Royalty. The assessee filed a detailed submission explaining the nature of the transaction. The detailed submissions of the assessee have been extracted by the AO at para-3 of his order and after extracting the detailed submissions the AO formed a belief that the income of Rs.192480000/- from license IMS software to Zylog Systems (India) Ltd. is taxable u/s. 9 (1) (vi) of the Act and under Article 12 of Indo-NZ DTAA.
Assessee strongly agitated the matter before the CIT(A) and placed strong reliance on the decision of the Hon’ble Jurisdictional High Court of Delhi in the case of Infrasoft Limited in ITA No.1034/2009.
After considering the facts and the submissions and after perusing the binding decision of the Hon’ble Jurisdictional High Court of Delhi the CIT(A) held as under :-
Before us the DR placed strong reliance on the assessment order but could not bring any distinguishing decision in favour of the revenue.
We find that impugned quarrel has now been well settled by the judgment of the Hon’ble Supreme court in the case of Engineering Analysis Centre of Excellence Private Limited 432 ITR 471 wherein the Hon’ble Supreme Court has also considered the Judgment of Hon’ble Delhi High Court. The relevant finding of the Hon’ble Supreme Court read as under :-
Respectfully following the decision of the Hon’ble Supreme Court (supra) we decline to interfere with the findings of the CIT(A).
Ground No.1,2 and 3 are allowed and ground No.4 becomes infructuous. 14. In the result, the appeal filed by the Revenue is dismissed. 15. Decision announced in the open court in the presence of both representatives on 17.02.2022.