ACIT (IT) 4(1)(1), Mumbai v. M/S REALIANCE JIO INFOCOMM. LTD., Mumbai

ITA 2216/MUM/2019 | 2018-2019
Pronouncement Date: 22-03-2021 | Result: Dismissed

Appeal Details

RSA Number 221619914 RSA 2019
Assessee PAN AABCI6363G
Bench Mumbai
Appeal Number ITA 2216/MUM/2019
Duration Of Justice 1 year(s) 11 month(s) 12 day(s)
Appellant ACIT (IT) 4(1)(1), Mumbai
Respondent M/S REALIANCE JIO INFOCOMM. LTD., Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 22-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 22-03-2021
Assessment Year 2018-2019
Appeal Filed On 09-04-2019
Judgment Text
ITA NO.: 2216/MUM/2019 ASSESSMENT YEAR: 2018 - 19 PAGE 1 OF 3 INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH MUMBAI [CORAM: PRAMOD KUMAR VICE PRESIDENT AND VIKAS AWASTHY JUDICIAL MEMBER] ITA NO.: 2216/MUM/2019 ASSESSMENT YEAR: 2018 - 19 DY. COMMISSIONER OF INCOME TAX (IT) 4(1)(1) MUMBAI .. APPELLANT VS. M/S. RELIANCE JIO INFOCOMM LTD. .RESPONDENT 3 RD FLOOR MAKER CHAMBER - IV 222 NARIMAN POINT MUMBAI 400021 [PAN: AABCI6363G] APPEARANCES: S. S. IYENGAR FOR THE APPELLANT NIMESH VORA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 09 2021 DATE OF PRONOU NCING THE ORDER : MARCH 2 2 2021 O R D E R PER PRAMOD KUMAR VP: 1. BY WAY OF THIS APPEAL THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 19 TH NOVEMBER 2014 IN THE MATTER OF ASCERTAINMENT OF TAX WITHHOLDING LIABILITY UNDER SECTION 248 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2015 - 16. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOWS: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. LD. CIT(A) HAS ERRED IN HOLDING THAT TAX WAS NOT REQUIRED TO BE DEDUCTED AT SOURCE ON THE PAYMENT MADE BY THE ASSESSEE TO SDL MULTI - LINGUAL SOLUTIONS (SINGAPORE) PTE LTD. AS IT DID NOT AMOUNT TO INCOME OF THE PAYEE BY WAY OF ROYALTY U/S 9(1 )(VI) OF THE IT ACT 1961? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN HOLDING THAT THE ACT HAS EXPANDED THE MEANING OF THE TERM ROYALTY BY ADDING EXPLANATIONS TO SECTION 9(1)(VI) THEREBY MEANING THAT EXPLANATION 4 THERETO CONSTITUTES NEW LAW AND DOES NOT EXPLAIN THE EXISTING LAW? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN NOT CONSIDERING EXPLANATION 4 TO SECTION 9(1)(VI) OF THE ACT AS BEING ITA NO.: 2216/MUM/2019 ASSESSMENT YEAR: 2018 - 19 PAGE 2 OF 3 DECLARATORY A ND CLARIFICATORY AMENDMENT EXPLAINING THE EXISTING LAW AND THAT IT SATISFY THE CONDITIONS LAID DOWN BY A CONSTITUTION BENCH OF HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (CENTRAL) - L NEW DELHI VS VATIKA TOWNSHIP PVT LTD (CIVIL APPEAL N O. 8750 OF 2014) ARISING OUT OF SLP (C) NO. 540 OF 2009 FOR BEING AS SUCH? 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN HOLDING THAT THE PAYMENT BY THE ASSESSEE IS NOT ROYALTY IN THE HANDS OF THE RECIPIENT ON T HE GROUND THAT WHILE MAKING AMENDMENTS TO THE ACT PARLIAMENT HAS NOT AMENDED THE DTAA WITH SINGAPORE? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN NOT TAKING INTO ACCOUNT THAT IN ABSENCE OF A DEFINITION OF THE TERMS INCLUDED IN THE PHRASEOLOGY 'USE OF OR RIGHT TO USE ANY COPYRIGHT OF A LITERARY ARTISTIC OR SCIENTIFIC WORK' IN RELATION TO ROYALTY IN THE INDIA - SINGAPORE DTAA ARTICLE 3(2) OF THE SAID DTAA ALLOWS FOR TAKING RECOURSE TO E MEANING CONTAINED IN THE DOMESTIC LAW OF THE STATE APPLYING THE TREATY? 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN NOT TAKING RECOURSE TO THE MEANING CONTAINED IN EXPLANATIONS 2 3 4 AND 5 TO SECTION 9(1)(VI) OF THE IT ACT 1961 AN D THE INDIAN COPYRIGHT ACT 1957 FOR DERIVING THE MEANING OF THE TERMS INCLUDED IN THE PHRASEOLOGY 'USE OF OR RIGHT TO USE ANY COPYRIGHT OF A LITERARY ARTISTIC OR SCIENTIFIC WORK' IN RELATION TO ROYALTY IN THE INDIA - SINGAPORE DTAA WHILE THE SAME IS MAND ATED BY ARTICLE 3(2) OF THE SAID DTAA? 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAVE WRONGLY PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TATA CONSULTANCY SERVICES (271 ITR 401) WHEREAS IN T HAT CASE THE QUESTION POSED BEFORE HON'BLE APEX COURT WAS 'WHETHER AN INTELLECTUAL PROPERTY CONTAINED IN FLOPPIES DISKS OR CD - ROMS WOULD BE 'GOODS' WITHIN THE MEANING OF ANDHRA PRADESH GENERAL SALES TAX ACT 1957' AND IT HAD NO RELATION TO SECTION 9(1)(V I) OF THE IT ACT? 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS WRONGLY PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TATA CONSULTANCY SERVICES (271 ITR 401) WHEREAS IN THAT CASE HON'BLE APEX COURT HAVE WHILE DECIDING ON THE MEANING OF THE WORD 'GOODS' IN RELATION TO SOFTWARE UNDER THE ANDHRA PRADESH GENERAL SALES TAX ACT 1957 HAVE CLEARLY STATED THAT 'IT IS TRITE THAT IT IS NOT PERMISSIBLE TO INTERPRET A WORD IN ACCORDANCE WITH ITS DE FINITION IN OTHER STATUTE AND MORE SO WHEN THE SAME IS NOT DEALING WITH ANY COGNATE SUBJECT'? 9. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS WRONGLY PLACED RELIANCE ON THE DISTINCTION BETWEEN THE TERMS 'COPYRIGHT IN AN AR TICLE' AND 'COPYRIGHTED ARTICLE' BASED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TATA CONSULTANCY SERVICES (271 ITR 401) IN A MATTER RELATING TO ANDHRA PRADESH GENERAL SALES TAX ACT 1957 WHEREAS THESE DISTINCTIONS HAVE NO RELEVANCE FOR THE PURPOSES OF EXPLANATIONS 2 3 4 AND 5 TO SECTION 9(1)(VI) OF THE IT ACT WHICH DEAL WITH SOFTWARE ROYALTY IN A DIRECT MANNER? ITA NO.: 2216/MUM/2019 ASSESSMENT YEAR: 2018 - 19 PAGE 3 OF 3 10. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) WAS CORRECT IN SEEKING ANSWERS TO THE QUESTIONS AS TO WHETHER THE COPYRIGHTS IN THE SOFTWARE WERE TRANSFERRED TO THE CUSTOMERS AND WHETHER ACCESS TO 'SOURCE CODES' IN THE SOFTWAR E WAS GRANTED TO THE ASSESSEE WHILE THERE BEING NO REQUIREMENT UNDER THE IT ACT TO ANSWER THESE QUESTIONS WITHIN THE MEANING OF EXPLANATION 2(V) TO SECTION 9(1)(VI) READ WITH EXPLANATIONS 3 4 AND 5 TO THE SAME CLAUSE? 3. THE SHORT QUESTION THAT WE ARE TO DECIDE IS WHETHER LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT NO TAX IS DEDUCTIBLE ON THE PAYMENT/CREDIT MADE BY THE APPELLANT TO SDL FOR SOFTWARE. THE ISSUE IS HOWEVER NO LONGER RES INTEGRA . IN THE RECENT CASE OF ENGINEERING ANALYSIS CENTRE OF EXCEL LENCE PVT LTD VS CIT [(2012) 125 TAXMANN. C OM 42 (SC)] HONBLE SUPREME COURT HAS FINALLY RESOLVED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND HELD THAT THE ASSESSEE DOES NOT HAVE ANY TAX WITHHOLDING OBLIGATION UNDER SECTION 195 FROM PAYMENTS MADE ON ACCOUNT O F SOFTWARE. 4. IN VIEW OF THE ABOVE DISCUSSIONS WE UPHOLD THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT THE APPEALS IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 2 2 DAY OF MARCH 2021 S D / - S D / - VIKAS AWASTHY PRAMOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) MUMBAI DATED THE 2 2 DAY OF MARCH 2021 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI