Dassault Systems v. DICT

327 ITR 1Reported decision2010#7854 most cited

What is Dassault Systems v. DICT authority for?

Payments for computer software do not constitute royalty under Section 9(1)(vi) or Article 12 of a DTAA if the licensee cannot commercially exploit the licensed product, despite restrictions on intellectual property.

14

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2016 to 2023.

Also referred to as

Dassault Systems v. DICT · 327 ITR 1 · Section 9(1)(vi) · Article 12 DTAA · software payment · royalty · non-taxable · commercial exploitation

Issues it is cited on

section 141section 9(i)section 2(43)section 14(a)section 193section 90(1)section 195(1)section 40(a)(ii)section 52section 195(2)azadi bachao andolansection 80h

Judgments citing Dassault Systems v. DICT

Isys Softech Private Limited, Jaipur vs. CIT (A), Jaipur

In the result, appeal of the assessee is allowed

ITA 528/JPR/2023[2011-12]Status: DisposedITAT Jaipur22 Nov 2023AY 2011-12

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. G. M. MehtaFor Respondent: Smt. Monisha Choudhary (Addl. CIT)
Section 143(3)Section 195Section 195(1)Section 271CSection 40Section 9(1)(vi)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 528/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2011-12 cuke Isys Softech Pvt. Ltd. ITO Vs. 11, Mohan Bari Outside Surajpole Ward 2(2), Gate Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAC 17859 J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. G. M. Mehta jktLo dh vksj ls@ Revenue by : Sm…

ACIT(Ltu-1), Mumbai vs. M/S. Tcs Ltd, Mumbai

ITA 5904/MUM/2019[2014-15]Status: DisposedITAT Mumbai15 Sept 2023AY 2014-15

Bench: Shri Vikas Awasthy () & Ms. Padmavathy S. ()

Section 10ASection 115JSection 14ASection 19Section 40Section 90(1)(a)

…By no stretch of imagination, can the payment for such computer software amount to royalty within the meaning of article 12 of the DTA A or section 9(i)(vi) of the Act. DASSAULT SYSTEMS K. K., In re [70101 32 ITR 175 (AAR), GEOQUEST SSTEMS B. V., In re 120101 327 ITR 1 (AAR), DIT v. ERICSSON A. B. 120121 343 ITR 470 (Delhi), DIT v. Nokia NETWORKS OY [2013] 358 ITR 259 (Delhi), D1T V. INFRASOFT LTD. [2014] 3 ITR-OL 333 (Delhi) and CIT v. Z'I'E CORPORATION [2017] 392 ITR 80 (Delhi) approved. STATE BANK OF INDIA V. COLLECTOR OF CUSTOMS (2000) 1 SCC 727 relied on. Royalty, under section 90)(vi) of the Act, means the…

Tata Consultancy Serrvices Limited, Mumbai vs. DCIT-1, Mumbai

ITA 5199/MUM/2019[2014-15]Status: DisposedITAT Mumbai15 Sept 2023AY 2014-15

Bench: Shri Vikas Awasthy () & Ms. Padmavathy S. ()

Section 10ASection 115JSection 14ASection 19Section 40Section 90(1)(a)

…By no stretch of imagination, can the payment for such computer software amount to royalty within the meaning of article 12 of the DTA A or section 9(i)(vi) of the Act. DASSAULT SYSTEMS K. K., In re [70101 32 ITR 175 (AAR), GEOQUEST SSTEMS B. V., In re 120101 327 ITR 1 (AAR), DIT v. ERICSSON A. B. 120121 343 ITR 470 (Delhi), DIT v. Nokia NETWORKS OY [2013] 358 ITR 259 (Delhi), D1T V. INFRASOFT LTD. [2014] 3 ITR-OL 333 (Delhi) and CIT v. Z'I'E CORPORATION [2017] 392 ITR 80 (Delhi) approved. STATE BANK OF INDIA V. COLLECTOR OF CUSTOMS (2000) 1 SCC 727 relied on. Royalty, under section 90)(vi) of the Act, means the…

Outotec (Finland) Oy (Now Merged With "Metso Minerals Oy" and the Merged Entity Has Been Renamed to Metso Outotec Finland Oy), Haryana vs. ACIT(International Taxation), Circle-2(1), Kolkata

In the result,both the appeals of the assessee are partly allowed

ITA 351/KOL/2022[2019-2020]Status: DisposedITAT Kolkata28 Feb 2023AY 2019-2020

Bench: Shri Rajpal Yadav & Shri Girish Agrawal

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri G. HukughaSema, CIT, DR
Section 143(3)Section 144C(13)Section 144C(5)Section 270ASection 271A

…copy on thehard disk of her computer via a modem connection. It is also of relevance thatthere may be restriction on the use to which transferee can put the software." 34. Further, the Authority For Advance Ruling in the case of GeoQueste SystemsB.V. In re., 327 ITR 1 (AAR) dealing with the non-taxability of payment forsoftware, held that payments would not constitute 'royalty' since the licensedproduct could not be commercially exploited by the licensee/customer. This wasdespite the fact there were clauses regarding the restriction on IntellectualProperty. In this regard, the AAR in the captioned case, at page…

Outotec(Finland) Oy (Now Merged With "Metso Minerals Oy" and the Merged Entity Has Been Renamed to Metso Outotec Finland Oy), Gurugram vs. DCIT(International Taxation), Circle-2(1), Kolkata

In the result,both the appeals of the assessee are partly allowed

ITA 350/KOL/2022[2018-2019]Status: DisposedITAT Kolkata28 Feb 2023AY 2018-2019

Bench: Shri Rajpal Yadav & Shri Girish Agrawal

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri G. HukughaSema, CIT, DR
Section 143(3)Section 144C(13)Section 144C(5)Section 270ASection 271A

…copy on thehard disk of her computer via a modem connection. It is also of relevance thatthere may be restriction on the use to which transferee can put the software." 34. Further, the Authority For Advance Ruling in the case of GeoQueste SystemsB.V. In re., 327 ITR 1 (AAR) dealing with the non-taxability of payment forsoftware, held that payments would not constitute 'royalty' since the licensedproduct could not be commercially exploited by the licensee/customer. This wasdespite the fact there were clauses regarding the restriction on IntellectualProperty. In this regard, the AAR in the captioned case, at page…

Tata Consultancy Services Ltd, Mumbai vs. ACIT Large Tax Payer Unit-1, Mumbai

797/Mum/2018

ITA 1769/MUM/2018[2013-14]Status: DisposedITAT Mumbai11 Apr 2022AY 2013-14
Section 143(3)Section 2Section 2(43)Section 37Section 40Section 90

…y no stretch of imagination, can the payment for such computer software amount to royalty within the meaning of article 12 of the DTA A or section 9(i)(vi) of the Act. DASSAULT SYSTEMS K. K., In re [70101 32 ITR 175 (AAR), GEOQUEST SSTEMS B. V., In re 120101 327 ITR 1 (AAR), DIT v. ERICSSON A. B. 120121 343 ITR 470 (Delhi), DIT v. Nokia NETWORKS OY [2013] 358 ITR 259 (Delhi), D1T V. INFRASOFT LTD. [2014] 3 ITR-OL 333 (Delhi) and CIT v. Z'I'E CORPORATION [2017] 392 ITR 80 (Delhi) approved. STATE BANK OF INDIA V. COLLECTOR OF CUSTOMS (2000) 1 SCC 727 relied on. Royalty, under section 90)(vi) of the Act, means the…

Tibco Software B.V., Pune vs. Deputy Commissioner of Income Tax, (It), Circle - 2, Pune

Appeal is allowed for statistical purposes

ITA 2979/PUN/2017[2014-15]Status: DisposedITAT Pune29 Mar 2022AY 2014-15

Bench: Shri R.S.Syal & Sonjoy Sarma,Jm Assessment Year : 2014-15 Tibco Software B.V. ...... Appellant C/O Tibco Software India P.Ltd. 3 Floor, Binnarius,Deepak Complex, National Games Road, Shastri Nagar, Yerwada, Pune – 411 006. Pan : Aaect3252G V/S. Dcit(It),Circle-2, Pune ……Respondent

For Appellant: Shri Somil AgarwalFor Respondent: Shri Rajiv Kumar
Section 144C(13)Section 274

…CIT Vs. Nokia Networks (2013) 212 Taxman 68 (Del), DCIT Vs. Ericsson A.B. (2012) 343 ITR 470 (Del), Tata Consultancy Services State of Andhra Pradesh (2004)271 ITR 401 (SC), Dassault Systems KK, In Re (2010) 229 CTR 105 (AAR), Geoquast Systems BV, Inre (2010) 327 ITR 1 (AAR), DDIT Vs. Reliane Industries Ltd. (2011) 43 SOT 506 (Mumbai), ITAT. 8. On the receipt of the above draft assessment order, the appellant filed its objection before Dy. CIT (International Taxation) Circle, Pune,, hereinafter referred as DRP. The DRP considering the decision relied upon by the appellant held that consideration received towards…

DCIT, Circle - 2 (1), Interntional Taxation, Chennai vs. M/S. Petrofac Engineering Services India Pvt. Ltd, Chennai

In the result, appeals filed by the revenue for both

ITA 657/CHNY/2020[2012-13]Status: DisposedITAT Chennai22 Dec 2021AY 2012-13

Bench: Shri Mahavir Singh, Vice- & Shri G.Manjunathaआयकरअपीलसं./I.T.A.Nos.656 & 657/Chny/2020 ("नधा"रणवष" / Assessment Years: 2011-12 & 2012-13) Vs M/S. Petrofac Engineering The Deputy Commissioner Of Income Tax, Services Pvt.Ltd. 7Th Floor, Block 9A Circle-2(1), International Taxation, Chennai. Dlf Infocity Sez 1/124 Shivaji Gardens, Nandambakkam Post Manapakkam, Chennai-600089. Pan: Aaecp 1211H (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr. Ashik Shah, C.A ""For Respondent: 08.12.2021
Section 195Section 201(1)Section 9

…xt of non-exclusive EULAs, not being so. [Para 117] • Consequently, the view contained in the determinations of the AAR in Dassault Systems, KK, In re [20210] 188 Taxman 223/322 ITR 125 (AAR —New Delhi) and Geoquest Systems B.V., In re [2010] 193 Taxnian 8 1/327 ITR 1 (AAR - New Delhi) and the judgments of the High Court of Delhi in DIT v. Ericsson A.B., [2011] 16 taxmann.com 371/[20l2] 204 Taxman 192/343 ITR 470, DIT v. Nokia Networks OY [2012] 25 taxmann.com 225/[2013] 212 Taxman 68/358 ITR 259 (Delhi) DIT v. Infrasoft Ltd. [2013] 39 taxmann.com 38/[2014] 220 Taxman 273 (Delhi) CIT v. ZTE Corporation [2017] 77…

DCIT, Circle - 2 (1), International Taxation, Chennai vs. M/S. Petrofac Engineering Services India Pvt. Ltd., Chennai

In the result, appeals filed by the revenue for both

ITA 656/CHNY/2020[2011-12]Status: DisposedITAT Chennai22 Dec 2021AY 2011-12

Bench: Shri Mahavir Singh, Vice- & Shri G.Manjunathaआयकरअपीलसं./I.T.A.Nos.656 & 657/Chny/2020 ("नधा"रणवष" / Assessment Years: 2011-12 & 2012-13) Vs M/S. Petrofac Engineering The Deputy Commissioner Of Income Tax, Services Pvt.Ltd. 7Th Floor, Block 9A Circle-2(1), International Taxation, Chennai. Dlf Infocity Sez 1/124 Shivaji Gardens, Nandambakkam Post Manapakkam, Chennai-600089. Pan: Aaecp 1211H (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr. Ashik Shah, C.A ""For Respondent: 08.12.2021
Section 195Section 201(1)Section 9

…xt of non-exclusive EULAs, not being so. [Para 117] • Consequently, the view contained in the determinations of the AAR in Dassault Systems, KK, In re [20210] 188 Taxman 223/322 ITR 125 (AAR —New Delhi) and Geoquest Systems B.V., In re [2010] 193 Taxnian 8 1/327 ITR 1 (AAR - New Delhi) and the judgments of the High Court of Delhi in DIT v. Ericsson A.B., [2011] 16 taxmann.com 371/[20l2] 204 Taxman 192/343 ITR 470, DIT v. Nokia Networks OY [2012] 25 taxmann.com 225/[2013] 212 Taxman 68/358 ITR 259 (Delhi) DIT v. Infrasoft Ltd. [2013] 39 taxmann.com 38/[2014] 220 Taxman 273 (Delhi) CIT v. ZTE Corporation [2017] 77…

ITO (E) -1(1), Mumbai vs. Aditya Birla Foundation, Mumbai

In the result, Revenue’s appeal is partly allowed

ITA 6279/MUM/2019[2012-13]Status: DisposedITAT Mumbai28 Oct 2021AY 2012-13

Bench: The Hon'Ble Itat In Its Own Case In A.Y.2011-12 Which Is Pending For Adjudication."

Section 11Section 11(2)Section 13(3)Section 25

…voking 2011-12 (ITA No. 4065/Mum/2019) (Para 22 and 24) section 13(3). Proposition 1: If the value of a transaction has been approved by a competent authority, it is not open for income-tax authorities to question the same 4 Virendra v. Appropriate Authority (327 ITR 1 85) (Bom HC) 5 CIT v. Shriram Pistons and Rings Ltd. (181 ITR 230) (Del HC) Proposition II: Reference to DVO cannot be made without rejecting books of accounts. 6 Sargam Cinema v. CIT (328 ITR 513) (SC) 7 Amol Chand Vurshncy Sewa Sansthan v. ACIT (142 ITD 658) (Agra T) Proposition III: Adequate rent is not equivalent to Fair Market rent 8 Commissio…

Engineering Analysis Centre of Excellence Private Limited vs. The Commissioner of Income Tax

C.A. No.-008733-008734 - 2018Supreme Court02 Mar 2021

Bench: HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN

…d have to refer to section 52 of the Indian Easements Act 1882. He stressed the fact that the ruling by the AAR in the case of Dassault Systems, K.K., In Re., (2010) 322 ITR 125 (AAR), as followed in Geoquest Systems B.V. Gevers Deynootweg, In Re., (2010) 327 ITR 1 (AAR), was not appealed against by the Revenue, and the exhaustive statement of law contained therein is something that he relied upon. According to him, if the position of the Revenue were correct, arbitrary results would ensue, inasmuch as his client, receiving a 2% commission, would, however, after the disallowance of the deduction under s…

Amadeus Global Travel Distribution Sa, Spain vs. ADIT, New Delhi

The appeal of the assessee is allowed with above direction

ITA 1494/DEL/2011[2006-07]Status: DisposedITAT Delhi18 Jul 2019AY 2006-07

Bench: Shri Kuldip Singh & Shri Prashant Maharishiamadeus Global Travel Vs. Adit, Distribution Sa Circle-1(1), (Now Known As Amadeus It International Taxation, Group Sa), New Delhi Salvador De Madariaga, E- 28027, Madrid, Spain Pan: Aafca9629P (Appellant) (Respondent)

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri G. K. Dhall, CIT DR
Section 80HSection 9

…er of the ‗copyright‘ in the software to the end users or the VAR/reseller so as to bring the transaction within the ambit of the definition of ‗royalty‘. The aforesaid principle has been affirmed by the AAR in the case of Geoquest Systems B.V. vs. DIT [2010] 327 ITR 1, where it has been held that mere use of computer software without conferment of the right to use the copyright does not fall within the ambit of the royalty. The observations of the AAR are extracted as under: ―9. The crucial clauses in the Agreement concerning Dassault Systems K.K.‘s case (supra) are substantially similar to the clauses in the ag…

Galatea Ltd, Mumbai vs. DCIT (It) RG 2(3)(2), Mumbai

In the result, the assessee’s appeal for A

ITA 5434/MUM/2015[2012-13]Status: DisposedITAT Mumbai29 Jun 2016AY 2012-13

Bench: Shri Jason P. Boaz & Shri Saktijit Daym/S. Galatea Ltd. Dcit (International Taxation) P.O. 1156, Industrial Vs. Range 2(3)(2) Area, Dalton, Israel Mumbai Pan - Aadcg8396D Appellant Respondent

For Appellant: Shri Bomi Daruwala &For Respondent: Shri Jasbir Chouhan
Section 143(3)Section 144CSection 144C(1)Section 144C(13)Section 144C(5)Section 9(1)(vi)Section 90(2)

…IN THE INCOME TAX APPELLATE TRIBUNAL "L" Bench, Mumbai Before Shri Jason P. Boaz, Accountant Member and Shri Saktijit Day, Judicial Member M/s. Galatea Ltd. DCIT (International Taxation) P.O. 1156, Industrial Vs. Range 2(3)(2) Area, Dalton, Israel Mumbai PAN - AADCG8396D Appellant Respondent Appellant by: Shri Bomi Daruwala & Ms. Priyanka Jain Respondent by: Shri Jasbir Chouhan Date of Hearing: 21.06.2016 Date of Pronouncement: 29.06.2016 O R D E R Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the final order of assessment for A.Y. 2012-13 passed under section 143(3) r.w.s. 144C(13…

Galatea Ltd, Mumbai vs. DCIT It RG 2(3)(2), Mumbai

In the result, appeal may be treated as partly allowed for statistical purposes

ITA 749/MUM/2015[2011-12]Status: DisposedITAT Mumbai24 Feb 2016AY 2011-12

Bench: Shri C.N. Prasad & Shri Ashwani Taneja

For Appellant: Shri Bomi Daruwala a/wFor Respondent: Shri Jasbir Chauhan, CIT-DR
Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 234BSection 271(1)(c)Section 9(1)(vi)

…IN THE INCOME TAX APPELLATE TRIBUNAL “L” BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA no.749/Mum./2015 (Assessment Year : 2010–11) Galatea Limited, P.O. 1156 Industrial Area Dalton, Israel c/o Vaish Associates, Advocates 106, Peninsula Centre ……………. Appellant Dr. S.S. Rao, Parel Mumbai 400 012 PAN – AADCG8396D v/s Dy. Commissioner of Income Tax International Taxation, Range– ……………. Respondent 2(3)(2) Mumbai Assessee by : Shri Bomi Daruwala a/w Ms. Priyanka Jain, CAs Revenue by : Shri Jasbir Chauhan, CIT-DR Date of Hearing- 13.01.2016 Date of Order…

Dassault Systems v. DICT (327 ITR 1) — Cited in 14 Judgments | BharatTax