THE COMMISSIONER OF INCOME T vs. M/S. ABAQUS ENGINEERING INDIA

T.C.A.Nos.120 to 122 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.120 to 122 of 2016 The Commissioner of Income Tax, Chennai. ... Appellant in all TCAs Versus M/s.Abaqus Engineering India Pvt Ltd., (Now known as Dassault Systems P Ltd) 10th Floor, ASV N Ramanas Tower, 37 & 38, Venkatramana Road, T.Nagar, Chennai - 600 017. ... Respondent in all TCAs Appeals preferred under Section 260A of the Income Tax Act, 1961, against the order dated 16.08.2011 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.Nos.1698,1699 and 1700/Mds/2010.

For Appellant : Mr.T.Ravikumar Standing Counsel in all TCAs For Respondent : Mr.R.Sandeep Bagmar in all TCAs Page 1/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.120 to 122 of 2016

COMMON JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 16.09.2011 passed by the Income Tax Appellate Tribunal, “B” Bench, Chennai, in I.T.A.Nos.1698, 1699 and 1700/Mds/2010, relating to the assessment years 2002-03, 2003-04 and 2004-05, by raising the following substantial questions of law:- TCA.Nos.120 and 122 of 2016:-

"(i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the disallowance under section 40(a)(i) on the amount paid to Abaqus Inc without deduction of tax at source is to be allowed?" (ii) Whether the assessee who sold the license version of software product developed by the parent company could be treated as royalty payment made to nonresident and covered under Section 9(1)(vi) of the Income Tax Act?" Page 2/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.120 to 122 of 2016 TCA.No.121 of 2016:-

"(i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the disallowance made under Section 40(a) (i) of Income Tax Act on the amount paid to Abaqus Inc without deduction of tax at source is to be allowed? (ii) Is not the finding of the Tribunal bad especially when the assessee who sold the licensed version of software product developed by the parent company is not to be treated as royalty payment made to nonresident even though the same would fall under section 9(1)(vi) of the Income Tax Act?" 2. When the matters were taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals is less than the threshold limit. Page 3/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.120 to 122 of 2016 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 29.08.2022

Internet : Yes

Index : Yes / No av To 1. The Income Tax Appellate Tribunal, “B” Bench, Chennai. 2. The Commissioner of Income Tax, Chennai. 3. The Deputy Commissioner of Income-tax, Company Circle - 1(1), Chennai 600 034. 4. The Commissioner of Income Tax (Appeals)-III, Chennai. Page 4/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.120 to 122 of 2016 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. av

T.C.A.Nos.120 to 122 of 2016 29.08.2022 Page 5/5 https://www.mhc.tn.gov.in/judis