CIT v. Samsung Electronics Ltd.

Nds Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-1(2) International Taxation, Bangalore

In the result, all these appeals are partly allowed

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(It)A Nos. & Appellant Respondent Assessment Year 363/Bang/2017 M/S. Synamedia Limited The Assistant Commissioner Of 2006-07 (Formerly Known As ‘Nds Limited), Income Tax (International Taxation), C/O M/S. Synamedia India Private Circle -1(2), Limited, Bengaluru. Block 9A & 9B, Pritech Park, Survey No.51-64/4, Sarjapur Outer Ring Road, Bellandur Village, Bengaluru – 560 103. Pan : Aabcn 2524 L 504/Bang/2017 -Do- -Do- 2012-13 505/Bang/2017 -Do- -Do- 2013-14 255/Bang/2014 -Do- The Assistant Director Of Income 2010-11 Tax, (International Taxation), Circle – 1(1) [Now Assistant Commissioner Of Income Tax (International Taxation), Circle – 1(2), Bengaluru. Appellant By : Shri Sharath Rao, Advocate Respondent By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 01.11.2021 Date Of Pronouncement : 12.11.2021

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B. R. BASKARAN, ACCOUNTANT MEMBER IT(IT)A Nos. and Appellant Respondent Assessment Year 363/Bang/2017 M/s. Synamedia Limited The Assistant Commissioner of 2006-07 (formerly known as ‘NDS Limited), Income Tax (International Taxation), C/o M/s. Synamedia India Private Circle -1(2), Limited, Bengaluru. Block 9A and 9B, Pritech Park, Survey No.51-64/4, Sarjapur Outer Ring Road, Bellandur Village, Bengaluru – 560 103. PAN : AABCN 2524 L 504/Bang/2017 -do- -do- 2012-13 505/Bang/2017 -do- -do- 2013-14 255/Bang/…

Cisco Systems International B.V., Bangalore vs. Joint Commissioner of Income Tax, International Taxation, Circle-1(1), Bangalore

In the result appeal filed by assessee stands partly allowed

Bench: Shri Chandra Poojari & Smt Beena Pillaiit(It)A. No. 188/Bang/2021 Assessment Year: 2017-18 M/S. Cisco Systems International B.V., C/O Srbc & Associates Llp The Assistant (Authorised Representative) Commissioner Of Income “Divyasree Chambers”, Tax, First Floor, ‘A’ Wing, # 11 O’ International Taxation (1), Shaughnessy Road, Vs. Bengaluru. Langford Gardens, Bengaluru – 560 025. Pan: Aadcc9201D (Appellant) (Respondent) Appellant By Shri Nageswar Rao, Advocate Respondent By Shri Muzaffar Hussain, Cit (Dr) Date Of Hearing : 04.10.2021 Date Of Pronouncement : 12.10.2021 Order Per Beena Pillai. Present Appeal Has Been Filed By Assessee Against The Final Assessment Order Dated 23.03.2021 Passed By Jcit-Intl. Tax, Bangalore For A.Y. 2017-18. It Is Submitted That The Only Issue Raised By Assessee In This Appeal Relate To Treating The Receipts Of Assessee’S On Account Of Sale Of Software To The Indian Customers, As Royalty.

…and under the DTAA between India and Netherlands as royalty on which TDS is liable to be deducted under section 195 of the Act. The Ld.AO relied on the decision of Hon’ble Karnataka High Court in case of CIT vs Samsung Electronics Co Ltd., reported in (2011) 16 Taxmann.com 141, decision of AAR in case of Millennium ITA Software Ltd., Citrix Systems Asia Pacific Ltd., to come to the conclusion that the said receipts are taxable as royalty under the provisions of IT Act and India-Netherlands treaty. 4. At the outset, both sides submit that the issue raised on merits in the present appeal stands squarely covered by…

M/S Ibm Singapore Pte Limited, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation) Circle-1(1), Bangalore

In the result, the appeal filed by assessee stands partly allowed

…and Singapore. Accordingly, he made addition of Rs.441.94 crores to the total income returned by the assessee. The A.O. Page 4 of 10 placed his reliance on the decision rendered by Hon’ble Karnataka High Court in the case of Samsung Electronics Company Ltd. (345 ITR 494) and Synopsis International Old Limited (ITA Nos.11-15/2008). The Ld. CIT(A) also confirmed the addition and hence the assessee has filed this appeal before us. 6. The Ld. A.R. submitted that the assessee has sold only licenses to use the software and it did not part with any of its right over the products within the meaning of Copy right Act. He…

M/S. Infosys Bpo Linited, Bangalore vs. The Deputy Commissioner of Income Tax, International Taxation, Circle-1(1), Bangalore

In the result appeals filed for assessment years under consideration stands partly allowed

Bench: Shri B.R. Baskaran & Smt Beena Pillaiit(It)A No. 986/Bang/2017 Assessment Year: 2016-17 The Deputy M/S. Infosys Bpo Ltd., Commissioner Of Electronic City, Income Tax, Hosur Road, International Taxation, Bangalore – 560 100. Vs. Circle 1 (1), Pan: Aaccp4478N Bangalore. (Appellant) (Respondent) & It(It)A No. 990/Bang/2017 Assessment Year: 2015-16 The Deputy M/S. Infosys Bpo Ltd., Commissioner Of Electronic City, Income Tax, Hosur Road, International Taxation, Bangalore – 560 100. Vs. Circle 1 (1), Pan: Aaccp4478N Bangalore. (Appellant) (Respondent) Appellant By : Shri Padamchand Khincha, Ca Shri Priyadarshi Misra, Addl. Respondent By : Cit (Dr) Date Of Hearing : 16.07.2021 Date Of Pronouncement : 11.10.2021 Order Per Beena Pillai

…rs who would then train new analysts etc. The Ld.CIT(A) thus held that the certain services rendered by Zintro are in the nature of technical services. He relied on the decision of Hon’ble Karnataka High Court in case of Samsung Electronics reported in (2012) 345 ITR 494. The Ld.CIT(A) following the decision held that the payments made to the Zintro are taxable in India under section 9(1)(vi) (vii) and Article 12 of India US DTAA. The Ld.AR relied on agreement between assessee and Zintro placed at page 16-19. He submitted that issue needs to be analyzed in the light of principles laid down by Hon’ble Supreme Cour…

M/S. Infosys Bpo Limited, Bangalore vs. The Deputy Commissioner of Income Tax, International Taxation, Circle-1(1), Bangalore

In the result appeals filed for assessment years under consideration stands partly allowed

Bench: Shri B.R. Baskaran & Smt Beena Pillaiit(It)A No. 986/Bang/2017 Assessment Year: 2016-17 The Deputy M/S. Infosys Bpo Ltd., Commissioner Of Electronic City, Income Tax, Hosur Road, International Taxation, Bangalore – 560 100. Vs. Circle 1 (1), Pan: Aaccp4478N Bangalore. (Appellant) (Respondent) & It(It)A No. 990/Bang/2017 Assessment Year: 2015-16 The Deputy M/S. Infosys Bpo Ltd., Commissioner Of Electronic City, Income Tax, Hosur Road, International Taxation, Bangalore – 560 100. Vs. Circle 1 (1), Pan: Aaccp4478N Bangalore. (Appellant) (Respondent) Appellant By : Shri Padamchand Khincha, Ca Shri Priyadarshi Misra, Addl. Respondent By : Cit (Dr) Date Of Hearing : 16.07.2021 Date Of Pronouncement : 11.10.2021 Order Per Beena Pillai

…rs who would then train new analysts etc. The Ld.CIT(A) thus held that the certain services rendered by Zintro are in the nature of technical services. He relied on the decision of Hon’ble Karnataka High Court in case of Samsung Electronics reported in (2012) 345 ITR 494. The Ld.CIT(A) following the decision held that the payments made to the Zintro are taxable in India under section 9(1)(vi) (vii) and Article 12 of India US DTAA. The Ld.AR relied on agreement between assessee and Zintro placed at page 16-19. He submitted that issue needs to be analyzed in the light of principles laid down by Hon’ble Supreme Cour…

M/S. Cisco Systems International B.V., Bengaluru vs. Assistant Commissioner of Income Tax, International Taxation, Circle- 1(1), Bengaluru

In the result, the appeal filed by the assessee is allowed

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A No.1415/Bang/2019 Assessment Year : 2016-17

…by filing its objections before Ld. DRP. However, the Ld. DRP noticed that it has affirmed the view taken by the A.O. in the assessment year 2014-15 by following the decision rendered by Hon’ble High Court of Karnataka in the case of Samsung Electronics Ltd. (345 ITR 494) and certain other decisions. Accordingly, the Ld. DRP rejected the objections filed by the assessee. Accordingly, the A.O. passed the final assessment order determining the income of the assessee at Rs.1132.10 cores. 3. The Ld. A.R. submitted that the A.O. has assessed the sale proceeds of software as royalty in assessment year 2014-15 and 2015…

Autodesk Asia Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation), Circle-1(1), Bangalore

In the result, appeal of the assessee is allowed

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.1861/Bang/2017 Assessment Year : 2014-15 M/S. Autodesk Asia Pte Ltd., Vs. The Deputy Commissioner Of Income Tax C/O Autodesk India Pvt. Ltd., (International Taxation), Diyashree Chambers, Circle -1(1), A4, ‘A’ Wing, 2Nd Floor, Bengaluru. Langford Road, Bengaluru – 560 025. Pan : Aafca 6398 D Appellant Respondent Appellant By : Smt. Manasa Anantha, Advocate Respondent By : Ms. Neera Malhotra, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 15.09.2021 Date Of Pronouncement : 20.09.2021 O R D E R Per N. V. Vasudevan: This Is An Appeal By The Assessee Against The Final Order Of Assessment Dated 14.07.2017 By The Dcit(International Taxation), Circle – 1(1), Bengaluru, Passed Under Section 143(3) R.Ws. 144C(5) Of The Income Tax Act, 1961 (Hereinafter Called ‘The Act’), Relating To Assessment Year 2014-15. 2. In This Appeal, The Question For Consideration Is Whether The Assessee Who Is A Non-Resident & Tax Resident Of Singapore In Terms Of The India- Singapore Double Taxation Avoidance Agreement (Dtaa) Who Acts As A Distributor Of Computer Software & Providing Ancillary Services In The Asia

…ds placed before us. We note that Hon'ble Supreme Court considered the issue by observing as under:- "3. One group of appeals arises from a common judgment of the High Court of Karnataka dated 15.10.2011 reported as CIT v. Samsung Electronics Co. Ltd., (2012) 345 ITR 494, by which the question which was posed before the High Court, was answered stating that the amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers, amounted to royalty and as this was .so, the same constituted taxable income deemed to accrue in India under section 9(1)(vi) of the Income Tax Act, 1961 […

M/S. Myntra Designs Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation), Circle- 1, Bangalore

In the result, all the three appeals of the assessee are allowed

Bench: Shri George George K. & Shri B.R. Baskaranit(It)A Nos.598 To 600/Bang/2020 Assessment Year : 2012-13 To 2014-15

…IT(IT)A Nos.598 to 600/Bang/2020 M/s. Myntra Designs Pvt. Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER IT(IT)A Nos.598 to 600/Bang/2020 Assessment Year : 2012-13 to 2014-15 M/s. Myntra Designs Pvt. Ltd. AKR Tech Park, 3rd Floor Deputy Commissioner of 7th Mile, Krishna Reddy Industrial Income-tax Area (International Taxation) Vs. Hosur Road Circle-1(2) Bangalore 560 068 Bangalore PAN NO : AAECM9636P APPELLANT RESPONDENT Appellant by : Shri Percy Pardiwalla, Sr. A.R. Respondent by : Shri Muz…

M/S. Myntra Designs Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation), Circle- 1, Bangalore

In the result, all the three appeals of the assessee are allowed

Bench: Shri George George K. & Shri B.R. Baskaranit(It)A Nos.598 To 600/Bang/2020 Assessment Year : 2012-13 To 2014-15

…IT(IT)A Nos.598 to 600/Bang/2020 M/s. Myntra Designs Pvt. Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER IT(IT)A Nos.598 to 600/Bang/2020 Assessment Year : 2012-13 to 2014-15 M/s. Myntra Designs Pvt. Ltd. AKR Tech Park, 3rd Floor Deputy Commissioner of 7th Mile, Krishna Reddy Industrial Income-tax Area (International Taxation) Vs. Hosur Road Circle-1(2) Bangalore 560 068 Bangalore PAN NO : AAECM9636P APPELLANT RESPONDENT Appellant by : Shri Percy Pardiwalla, Sr. A.R. Respondent by : Shri Muz…

M/S. Myntra Designs Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (International Taxation), Circle- 1(2), Bangalore

In the result, all the three appeals of the assessee are allowed

Bench: Shri George George K. & Shri B.R. Baskaranit(It)A Nos.598 To 600/Bang/2020 Assessment Year : 2012-13 To 2014-15

…IT(IT)A Nos.598 to 600/Bang/2020 M/s. Myntra Designs Pvt. Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER IT(IT)A Nos.598 to 600/Bang/2020 Assessment Year : 2012-13 to 2014-15 M/s. Myntra Designs Pvt. Ltd. AKR Tech Park, 3rd Floor Deputy Commissioner of 7th Mile, Krishna Reddy Industrial Income-tax Area (International Taxation) Vs. Hosur Road Circle-1(2) Bangalore 560 068 Bangalore PAN NO : AAECM9636P APPELLANT RESPONDENT Appellant by : Shri Percy Pardiwalla, Sr. A.R. Respondent by : Shri Muz…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle 1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circel-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

Accordingly treated as allowed for statistical purpose

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(It)A Nos.61 To 98/Bang/2021 Assessment Year: 2012-13 To 2017-18 (Excluding March 2016)

…clusion that the payments in question are in the nature of royalty and hence taxable in the hands of the non- resident in India by placing reliance on the decision of the decision of Hon'ble Karnataka High Court in the case of CIT vs. Samsung Electronics Ltd. 345 ITR 494 in favour of the revenue and against the Assessee. He submitted that the said decision of the Hon’ble Karnataka High Court, now stand overruled by the decision of the Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. (2021) 125 Taxmann.com 42 (SC). The court envisaged 4 situations in which software could be s…