“computer software”

Chapter III - Incomes Not IncludedSection 10BSection 10B Explanation 2 / Section 80HHF951 judgments

The decision most relied on for computer software is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on computer software

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT

432 ITR 471 · 2021 · Supreme Court

914

citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. Samsung Electronics Ltd.

345 ITR 494 · 2012 · High Court

461

citing judgments

Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

III v. HCL Technologies Ltd.

93 Taxmann.com 33 · 2018 · Supreme Court

245

citing judgments

When computing the deduction available under Section 10A of the Income-tax Act, communication expenses must be excluded from the total turnover for the purpose of calculating the eligible relief.

CIT v. Synopsis International Old Ltd.

212 Taxmann 454 · 2013 · High Court

177

citing judgments

Payments for computer software are treated as royalty income under Section 9(1)(vi) of the Income-tax Act, particularly concerning the expanded definition provided by Explanation 2 and Explanation 4.

CIT v. Asahi India Safety Glass Ltd.

346 ITR 329 · 2012 · High Court

129

citing judgments

Expenses incurred for software license purchase, development of miscellaneous software, and maintenance of websites are considered revenue in nature. Such expenses are deductible in the year they are incurred.

Amway India Enterprises v. DCIT

111 ITD 112 · 2008 · ITAT

127

citing judgments

Depreciation is allowable on computer software, including software licenses, at the rate of 60%.

Kotak Mahindra Primus Ltd. v. DDIT

11 SOT 578 · 2007 · ITAT

citing judgments

Payments for data processing services using a mainframe computer and specialized software are not taxable as fees for the use of equipment if the Indian entity lacks independent rights or physical access to use the computer or software.

Judgments citing computer software

DCIT CC 4 (4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3605/MUM/2023[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

DCIT CC 4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3603/MUM/2023[2016-17]Status: DisposedITAT Mumbai24 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

DCIT CC 4(4), Mumbai vs. Sanman Trade Impex Limited, Mumbai

The appeal of the Revenue is dismissed

ITA 3602/MUM/2023[2017-18]Status: DisposedITAT Mumbai24 Jul 2024AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3491/MUM/2023[2014-15]Status: DisposedITAT Mumbai24 Jul 2024AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax-Central Circle 4(4), Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3474/MUM/2023[2015-16]Status: DisposedITAT Mumbai24 Jul 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3473/MUM/2023[2016-17]Status: DisposedITAT Mumbai24 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle-4(4), Mumbai

ITA 3472/MUM/2023[2017-18]Status: DisposedITAT Mumbai24 Jul 2024AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Taxcentral Circle-4(4), Mumbai

In the result, appeals of the Revenue are dismissed whereas

ITA 3471/MUM/2023[2020-21]Status: DisposedITAT Mumbai24 Jul 2024AY 2020-21

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Mr. Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR

Section 10ASection 115JSection 143(3)Section 147Section 149Section 151Section 69C

distributors/purchasers name. Ans: Sir, the product name exported from Sanman Trade Impex Put Ltd, Surat SEZ are "ACTIVCRM" and "MP CRM WHITE LABEL (Computer Softwares). The distributors/purchases name are M/s Aureole Trading LLC from FY 13-14 to FY 16-17. M/s Dinowic

Sanman Trade Impex Limited, Mumbai vs. Assistant Commissioner of Income Tax- Central Circle 4(4), Mumbai

In the result, appeals of the Revenue are dismissed dismissed whereas appeals of the assessee are partly allowed appeals of the assessee are partly allowed

ITA 3470/MUM/2023[2021-22]Status: DisposedITAT Mumbai24 Jul 2024AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

For Appellant: Dr. Kishor Dhule, CIT-DRFor Respondent: Mr. Rakesh Joshi

Section 143(3)Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

Benetton India P.Ltd, Gurgaon vs. ACIT, Circle-4(2), New Delhi

ITA 496/DEL/2022[2017-18]Status: DisposedITAT Delhi24 Jul 2024AY 2017-18

Bench: Shri G. S. Pannu & Shri Yogesh Kumar U.S.I.T.A. No. 496/Del/2022 (A.Y 2017-18) Benetton India Pvt. Ltd., Asstt. Commissioner Of Income Plot No. 25B, Block Infocity Vs. Tax, Circle : 4 (2), Sector : 34, Gurugram, New Delhi. Haryana.Pan:Aaacd1013F (Appellant) (Respondent) Assessee By : Shri Deepak Chopra, H. S. Ajmani, Sh. Ankul Goel & Ms. Rashi Khanna, Advs Department By: Shri Mahesh Shah, [Cit] D.R. & Sh. Kanv Bali, Sr. Dr

For Appellant: Shri Deepak Chopra, H. S. Ajmani, ShFor Respondent: Shri Mahesh Shah

Section 143(3)Section 144BSection 144CSection 144C(13)

Schedule-D of fixed assets out of the same, business and commercial rights are of Rs. 3.75 Cr. and Computer software is of Rs. 1.15 cr. This highlights the difference in the asset holding of the assessee company vis- a-vis comparable company. Further, it is observed that the comparable

ACIT, Circle-4(2), New Delhi vs. Benetton India P.Ltd, Gurgaon

ITA 7389/DEL/2017[2010-11]Status: DisposedITAT Delhi24 Jul 2024AY 2010-11

For Appellant: Shri Deepak Chopra, H. S. Ajmani, ShFor Respondent: Shri Mahesh Shah

Section 143(3)Section 144BSection 144CSection 144C(13)

Corteva Agriscience Services India Private Limited, Hyderabad vs. DCIT, Circle-17(1), Hyderabad

In the result, the Ground No

ITA 253/HYD/2017[2011-12]Status: DisposedITAT Hyderabad23 Jul 2024AY 2011-12

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri Sandeep Bansal, CA and Shri Rohit Mittal, CAFor Respondent: : Shri Shakeer Ahamed, DR

Section 143(3)Section 144C(4)Section 92C

rival contentions. According to section 10 AA of the act the profits derived from the export of articles or things or services (including computer software) shall be the amount which bears to the profits of the business of the undertaking, being the Unit, the same proportion as the export turnover ... attributable to the delivery of the articles or things outside India or expenses, if any, incurred in foreign exchange in rendering of services (including computer software) outside India. Explanation 1 (ii) defines export as “export in relation to the Special Economic Zones” taking goods or providing services out of India

Cap Gemini Technology Services India Limited(Formerly Known As Igate Global Solution Limited)-M/S Patni Telecom Solutions Pvt Ltd, Changed Name to M/S.Igate Information Services Private Limited Merged With Igate Global Solutions Limited, Hyderabad vs. ITO, Ward - 2(1), Hyderabad

In the result, appeal raised by the assessee is dismissed

ITA 446/HYD/2015[2010-11]Status: DisposedITAT Hyderabad23 Jul 2024AY 2010-11

Bench: Shri Laliet Kumar & Shri Manjunatha, G.आ.अपी.सं /Ita No.446/Hyd/2015 (िनधा"रण वष"/Assessment Year: 2010-11) Cap Gemini Vs. Income Tax Officer Technology Services Ward 2(1) India Ltd(Formerly Igate Hyderabad Global Solutions Ltd) Hyderabad Pan:Aacca4255G (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Advocate A.V. Raghuram राज" व "ारा/Revenue By:: Shri Kumar Pranav, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 04/07/2024 घोषणा की तारीख/Pronouncement: 23/07/2024 आदेश/Order

For Appellant: Advocate A.V. RaghuramFor Respondent: : Shri Kumar Pranav, CIT(DR)

Section 10ASection 143(3)Section 92C(2)

page 27 of its order had discussed the extracts of the annual reports and recorded that this company is into the development of computer software which is similar to the functions performed by the assessee and therefore, the functions performed by the company are broadly comparable to that

The Dy.DIT, (Intl. Taxn.)- 1, Ahmedabad vs. Vodafone West Ltd., Ahmedabad

In the result, appeal of the Revenue stands dismissed

ITA 2398/AHD/2014[2013-14]Status: DisposedITAT Ahmedabad12 Jul 2024AY 2013-14

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं /Ita No.2398/Ahd/2014 "नधा"रण वष" /Assessment Year : 2013-14 The Dcit (International Vodafone West Ltd. बनाम/ Taxation)-1 Vodafone House Ahmedabad Corporate Road V/S. Prahladnagar Off S.G. Highway Ahmedabad-380 051 "थायी लेखा सं./Pan: Aaacf 1190 P अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Dinal Shah, Ar Revenue By : Shri Sudhakar Verma, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 04/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 12/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Revenue As Against The Order Passed By The Ld.Commissioner Of Income-Tax(Appeals)-Gandhinagar (Ahmedabad) [Hereinafter Referred To As “The Ld.Cit(A)”], Dated 02/06/2014, Arising Out Of The Assessment Order Passed By The Dy.Director Of Income-Tax (International Taxation)-1, Ahmedabad (Ao) Under Section 201(1) & 201(1A) The Dcit (Intl.Taxn.)-1 Vs. Vodafone West Ltd. Asst. Year : 2013-14

For Appellant: Shri Dinal Shah, ARFor Respondent: Shri Sudhakar Verma, Sr.DR

Section 195(1)Section 201(1)Section 9(1)Section 9(1)(vi)Section 90

Copyright Act. Where the core of a transaction is to authorize the end-user to have access to and make use of the “licensed” computer software product over which the licensee has no exclusive rights, no copyright is parted with and consequently, no infringement takes place, as is recognized ... section 52(1)(aa) of the Copyright Act. It makes no difference whether the end-user is enabled to use computer software that is customised to its specifications or otherwise. The DCIT (Intl.Taxn.)-1 vs. Vodafone West Ltd. Asst. Year : 2013-14 12 v) A non-exclusive, non-transferable licence

Asstt.Commissioner of Income Tax Circle-2, Nagpur vs. M/S Western Coalfields Limited, Nagpur

In the result, the departmental appeal is dismissed

ITA 156/NAG/2019[2015-16]Status: DisposedITAT Nagpur09 Jul 2024AY 2015-16

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Prakash Nanwani, CAFor Respondent: Shri Rajeev Benjwal, CIT DR

Section 143(3)Section 250Section 32A

eligibility of claim. In view of above, assessee is eligible for deduction u/s 32AC in respect to investment made by assessee in Railway Sidings, Computer & Software, First Aid Station and Civil Work for Road Weigh Bridge. G) The assessee during the consideration has made investment in Plant & Machinery ... office premises or any residential accommodation, including accommodation in the nature of a guest house; (iii) any office appliances including computers or computer software; (iv) any vehicle; or (v) any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation

Koteshwara V S S Bank, Udupi vs. Income Tax Officer, Ward-2, Udupi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1087/BANG/2024[2017-18]Status: DisposedITAT Bangalore08 Jul 2024AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2017-18

For Appellant: Sri Akshay K.S., A.RFor Respondent: Sri Subramanian S., D.R

Section 143(3)Section 246ASection 250Section 7Section 80PSection 80P(2)(a)

total income of the assessee of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years commencing from the assessment year relevant to the previous year in which the undertaking begins manufacture ... production. Sub-section (4) of section 10A provides the manner in which the profits derived from the export of articles or things or computer software shall be computed. Under sub-section (4) the proportion between the export turnover in respect of the articles or things, or, as the case

Prl Developers Private Limited, Mumbai City vs. Circle 8(2)(1), Mumbai

In the result, ground V of the assessee is allowed

ITA 1031/MUM/2024[2016-17]Status: DisposedITAT Mumbai05 Jul 2024AY 2016-17

Bench: Shri Anikesh Banerjee & Shri Gagan Goyal

Section 143(3)Section 250Section 3Section 56(2)(viib)

natural justice be held as bad in law and the additions/disallowances made be deleted. GROUND NO. Ill; DISALLOWANCE OF CLAIM OF DEPRECIATION ON COMPUTER SOFTWARE AMOUNTING TO RS. 84,40,051/2- 3 PRL Developers Pvt Ltd 1. On the facts and in circumstances of the case ... erred in upholding the AO's action of calculating depreciation on computer software @ 25% instead of @ 60% as claimed by the Appellant. 2. The Appellant prays that it be allowed depreciation (o;60% on computer software instead of depreciation @ 25%. 3. Without Prejudice to the above, the Appellant prays that

Indo German Carbons Limited, Ernakulam vs. ACIT Circle 1(2), Kochi

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 141/COCH/2023[2008-09]Status: DisposedITAT Cochin02 Jul 2024AY 2008-09

Bench: Shri Chandra Poojari & Shri Soundararajan K.Assessment Year: 2008-09

For Appellant: Remya S. Menon, A.RFor Respondent: Sri Ilaiyaraja K.S., Sr. D.R

Section 1Section 10(2)Section 10BSection 10B(1)Section 10B(2)

export-oriented undertaking and it is entitled for deduction u/s 10B of the Act only on the export of articles or things or computer software for 10 assessment years beginning from assessment year in which undertaking begins to manufacture or produce articles or things or computer software. Further, he submitted

Sundaram Finance Limited, Chennai vs. DCIT, Circle-1, Ltu, Chennai

ITA 636/CHNY/2023[2018-19]Status: DisposedITAT Chennai28 Jun 2024AY 2018-19

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita Nos.: 07, 08 & 09/Chny/2018 िनधा"रणवष" / Assessment Years: 2010-11, 2011-12 & 2011-12 Deputy Commissioner Of Income Sundaram Finance Limited, V. Tax, 21, Patullos Road, Large Taxpayer Unit -1, Chennai – 600 002. Chennai – 34. [Pan: Aaacs-4944-A] (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकरअपीलसं./Ita Nos.: 26, 27 & 28/Chny/2018 िनधा"रणवष" / Assessment Years: 2010-11, 2011-12 & 2011-12 Sundaram Finance Limited, Deputy Commissioner Of Income V. 21, Patullos Road, Tax, Chennai – 600 002. Large Taxpayer Unit -1, [Pan: Aaacs-4944-A] Chennai – 34. (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri. R. vijayaraghavan, AdvocateFor Respondent: Shri. V. Nandakumar, CIT

Section 143(3)

Rate of Depreciation on commercial Vehicles @50% (ii) loss on sale of repossessed assets (iii) Depreciation on software development (iv) Depreciation on computer software (v) Disallowance of bad Debts (vi) Non-Compete fees as revenue expenditure (vii) Business origination cost These are adjudicated as under: 15. Rate of Depreciation ... this appeal, as well. Therefore, for similar reasons, we dismiss the ground raised by the revenue for assessment year 2010-11. 18. Depreciation on Computer Software : 18.1 The assessee has claimed depreciation of Rs.48,48,510/- @60% on computer software purchased of Rs.96,04,553/- as an expenditure

Sundram Finance Lomited, Chennai vs. ACIT, Circle-1, Ltu, Chennai

ITA 81/CHNY/2022[2017-18]Status: DisposedITAT Chennai28 Jun 2024AY 2017-18

For Appellant: Shri. R. vijayaraghavan, AdvocateFor Respondent: Shri. V. Nandakumar, CIT

Section 143(3)