ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), CHENNAI, CHENNAI vs. SAIPEM INDIA PROJECTS PRIVATE LIMITED, CHENNAI

ITA 2319/CHNY/2024Status: DisposedITAT Chennai15 January 2025Bench: HON’BLE SHRI MANOJ KUMAR AGGARWAL (Accountant Member), SHRI MANU KUMAR GIRI (Judicial Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that software payments were not royalty, and following the decision of the High Court of Madras and Supreme Court, the disallowance was not justified. The Tribunal also held that the CIT(A)'s decision on benchmarking the ALP of outstanding receivables using the LIBOR rate was appropriate.

What were the facts?

The revenue appealed against the CIT(A)'s deletion of disallowance under Section 40(a)(i) for software payments to a foreign entity and for ALP adjustment on outstanding receivables. The revenue argued that the software payments were royalty and thus subject to TDS, and that the credit period for receivables should be benchmarked.

What were the issues?

1. Whether software payments to a non-resident are subject to TDS as royalty under Section 40(a)(i). 2. Whether the ALP of outstanding receivables from an AE should be adjusted using a benchmark rate like LIBOR or SBI PLR.

Which sections of the Income-tax Act were involved?

Section 40(a)(i),Section 143(3),Section 144C(3),Section 144B,Section 195

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Income Tax Appellate Tribunal, “D” BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM

Heard together (2 matters)

ITA No.2264/Chny/2024
ITA No.2319/Chny/2024

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Per BENCH:

1.

Aforesaid appeals by revenue for Assessment Years (AYs) 2017- 18 & 2018-19 have identical facts and issues. First, we take up appeal for AY 2017-18 which arises out of an order passed by learned Commissioner of Income Tax (Appeals), Chennai-16 [CIT(A)] on

The order continues below.

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