PR. COMMISSIONER OF INCOME TAX vs. M/S. IBM SINGAPORE PVT. LTD.

PR. COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, KORAMANGALA, BANGALORE.

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE 1(2), KORMANGALA, BANGALORE. …APPELLANTS (BY SRI. SUSHAL TIWARI, STANDING COUNSEL)

This appeal by the Revenue against the order dated 03.05.2023 in IT(IT)A.No.178/Bang/2023 passed by the Income Tax Appellate Tribunal ‘C’ Bench, Bengaluru (for short, ‘the Tribunal’) for the assessment year 2016-17.

The following substantial questions of law are raised for consideration of this Court:

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in holding that the payments made to non-resident entities were not in the nature of royalty as defined in Explanation 2 to Section 9(1)(vii) of the Act and the Double Taxation Avoidance Agreement as well?

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in holding that the sale of software license did not include a right or

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in not considering the fact that the development of advanced cloud-based computer software by the assessee would not come under copyright as envisaged in Section 14(a)/14(b) of the Copy Right Act?

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in not appreciating that conditions for holding applying Explanation 2(v) to Section 9(1)(vi) of the Act were fully satisfied in present case as payments were made to a non–resident by way of royalty for use of or the right to use any copy right and Review Petition filed by Revenue is pending for adjudication before Supreme Court in case Engineering Analysis Centre of Excellence (reported in 432 ITR page 471)?”

At the outset, learned counsel Smt.Manasa Ananthan appearing for the respondent submits that the Tribunal under impugned order answered the controversy by following its earlier order in the case of the assessee in ITA.No.1311 to 1313/Bang/2018 dated 03.09.2021 which was appealed by Revenue in ITA.No.681/2023 and Connected Matters, wherein this Court following the judgment of the Hon'ble Apex Court in ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VS. COMMISSIONER OF INCOME-TAX AND ANOTHER1, dismissed the appeal of the Revenue. Hence, learned counsel submits that in view of the order passed in ITA.No.681/2023 and connected matters, the present appeal also liable to be dismissed.

Learned standing counsel Sri.Sushal Tiwari appearing for the appellants/Revenue is unable to dispute the above submission.

Having considered the submissions of the learned counsel appearing for the parties, we are of the view that in the light of the judgment in ITA.No.681/2023 and connected matters, dated 12.08.2025, the present appeal fails. Accordingly stands dismissed.