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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)-42, New Delhi dated 16.08.2018 for A.Y. 2015-16.
The solitary grievance of the revenue is that the CIT(A) erred in deleting the addition of Rs.31481419/- from sale of software products in India and in holding that the revenue received by the assessee from supply of software is not taxable in India as Royalty as provided in the Article 12 form the Indian-Australia DTAA.
The counsel furnished the following calculation of tax effect :-
Amount post giving effect to rectification Amount as per application (attached as S. No. Particulars Assessment order Annexure 1)
Returned Income 9,63,224 9,63,224 1. 2,40,92,950 2,40,92,950 2 Disputed addition on account of sale of software products related to royalty 3. Assessed Income under normal provision (‘A’) 2,50,56,174 2,50,56,174 4. 9,63,224 9,63,224 Total Income chargeable had the total income under normal provision is reduced by disputed addition (‘B’) 5. Income for tax effect (A-B) 2,40,92,950 2,40,92,950 6. Income tax (20% as per assessment order) 48,18,590 36,13,943 . (15% as per rectification application applying DTAA rate) (T) - - 7 Add: Surcharge (‘ii’) Add: Education cess (2% of i + ii) (‘iii’) 96,372 8. 9. 48,186 Add: Secondary and higher education cess (1% of I +ii) (V) Total tax effect (i+ii+iii+iv) 49,63,148 36,13,943 10.
A perusal of the above show that the tax effect as per assessment order and as per order giving effect rectification application is less than Rs.50 lacs, therefore, this appeal filed by the revenue is dismissed as per Circular No.3/2018 read with Circular No.17/2019.
In the result, the appeal filed by the revenue is accordingly dismissed.
The order is pronounced in the open court on 14.02.2022 in the presence of both the rival representatives.