Onmobile Global Limited, Bangalore v. ITO, Bangalore

ITA 551/BANG/2011 | 2009-2010
Pronouncement Date: 29-03-2012 | Result: Dismissed

Appeal Details

RSA Number 55121114 RSA 2011
Assessee PAN AAACO3900E
Bench Bangalore
Appeal Number ITA 551/BANG/2011
Duration Of Justice 10 month(s) 18 day(s)
Appellant Onmobile Global Limited, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-03-2012
Date Of Final Hearing 29-03-2012
Next Hearing Date 29-03-2012
Assessment Year 2009-2010
Appeal Filed On 11-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO.551/BANG/2011 ASSESSMENT YEAR : 2009-10 ONMOBILE GLOBAL LTD. NO.26 BANNERGHATTA ROAD J.P. NAGAR III PHASE BANGALORE 560 076. PAN : AAACO 3900E VS. THE INCOME TAX OFFICER INTERNATIONAL TAXATION WARD 1(3) BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI T. SURYANARAYANA ADVOCATE RESPONDENT BY : SHRI SARAVANAN B. JT.CIT(DR) DATE OF HEARING : 29.03.2012 DATE OF PRONOUNCEMENT : 29.03.2012 O R D E R PER N.K. SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 14.02.2011 OF THE CIT(APPEALS)-IV BANGALORE. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: ITA NO.551/BANG/11 PAGE 2 OF 16 1. PAYMENT TOWARDS SOFTWARE TREATED AS ROYALTY AND HELD TO BE LIABLE FOR DEDUCTION OF TAX AT SOURCE UN DER SECTION 195 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) (HEREINAFTER REFERRED TO AS CIT(A)) ERRED IN RUL ING THAT THE APPELLANT WAS LIABLE TO DEDUCT TAX AT SOURCE ON PAYMENTS MADE ON SOFTWARE TO NON-RESIDENT PARTIES B ASED OUT OF USA AND FRANCE. 1.2 THE LEARNED CIT(A) ERRED IN RELYING ON THE DEC ISION OF THE HONOURABLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SAMSUNG ELECTRONICS COMPANY LIMITED [320 ITR 209]. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT T HE HONOURABLE SUPREME COURT HAS SET ASIDE THE ORDER OF HONOURABLE KARNATAKA HIGH COURT IN THE CASE OF GE I NDIA TECHNOLOGY CENTER PRIVATE LIMITED VS. CIT [327 ITR 456] REMANDING THE CASE BACK TO HIGH COURT TO DECIDE ON MERITS. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE DECISI ON OF HONOURABLE KARNATAKA HIGH COURT WAS NOT TOTALLY REV ERSED BY THE HONOURABLE SUPREME COURT. THE LEARNED CIT(A) HAS NOT TAKEN COGNIZANCE OF THE JURISDICTIONAL TRIBUNAL DECISION IN THE CASE OF VEL ANKANI MAURITIUS LIMITED [2010-TII-64-ITAT-BANG-INTL] WHEREIN TRIBUNAL OBSERVED THAT SINCE THE HONORABLE KARNATAKA HIGH COURT HAS NOT EXAMINED THE QUESTION REGARDING THE TAX LIABILITY OF THE NON-RESIDENT ASS ESSEE IN RESPECT OF THE PAYMENTS RECEIVED FROM THE ASSESSEE IN INDIA THE FACTS OF THE APPELLANT HAS TO BE CONSIDE RED OUTSIDE THE SCOPE OF THE DECISION OF THE HONORABLE KARNATAKA HIGH COURT. 1.3 THE LEARNED CIT(A) HAS ERRED IN RELYING ON THE DECISION OF TRIBUNAL IN CASE OF M/S MICROSOFT CORPORATION VS. A DIT (INTERNATIONAL TAX) DELHI [328 ITR 4]. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT T HE FACTS OF THE APPELLANTS CASE ARE DIFFERENT FROM THE FACT S OF THE AFOREMENTIONED CASE. 1.4 THE LEARNED CIT(A) ERRED IN RELYING ON THE DEC ISION OF THE HONOURABLE AUTHORITY FOR ADVANCE RULINGS (AAR) IN T HE CASE OF ABC IN RE [238 ITR 296] IN HOLDING THAT TH E PAYMENTS MADE BY THE APPELLANT WERE IN THE NATURE O F ITA NO.551/BANG/11 PAGE 3 OF 16 ROYALTY. THE LEARNED CIT(A) ERRED IN NOT APPRECIATI NG THAT THE FACTS OF THE APPELLANTS CASE ARE DIFFERENT FROM THE FACTS OF THE AFOREMENTIONED CASE. 2. INTEREST UNDER SECTION 201(1A) 2.1 THE LEARNED CIT(A) ERRED IN NOT DELETING THE L EVY OF INTEREST UNDER SECTION 201(1A) OF THE ACT 3. THE APPELLANT COMPANY CRAVES LEAVE TO ADD ALTE R OR AMEND ANY OF THE ABOVE GROUND AT THE TIME OF HEARIN G. 3. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE ACTION O F THE LD. CIT(APPEALS) IN CONFIRMING THE VIEW EXPRESSED BY THE AO IN HOLDING THAT THE PAYMENTS MADE ON SOFTWARE TO NON-RESIDENT PARTIES BASED OUT OF USA AND FRANCE WERE LIABLE TO DEDUCT TAX AT SOURCE. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS A LEADING PROVIDER OF MOBILE VALUE ADDED SERVICES AND PRODUCT S (MVAS) WITH AN EXPANDING INTERNATIONAL PRESENCE AND HAD MADE CERTA IN PAYMENTS TO NON- RESIDENTS FOR THE PURCHASE OF SOFTWARE FROM TELISMA SA FRANCE & TELENITY USA WITHOUT DEDUCTING ANY TAX AT SOURCE. THE DETAI LS OF PAYMENTS FOR THE FINANCIAL YEAR 2008-09 WERE AS UNDER:- TELENITY (USA) Q 55 93 177/- TELISMA SA (FRANCE) Q 10 56 49 994/- ---------------------- TOTAL Q 11 12 43 171/- ---------------------- 5. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE HAD NOT COMPLIED WITH THE PROVISIONS OF SECTION 195 OF THE INCOME-TA X ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT] HE THEREFORE I NITIATED PROCEEDINGS U/S. 201(1) OF THE ACT BY ISSUING NOTICE ON 4.3.2010 ASK ING THE ASSESSEE TO SHOW CAUSE AS TO WHY IT SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT IN ITA NO.551/BANG/11 PAGE 4 OF 16 RESPECT OF TAX NOT DEDUCTED AT SOURCE IN RESPECT OF PAYMENTS IN QUESTION. THE ASSESSEE SUBMITTED THAT THE PAYMENTS IN QUESTIO N WERE NEITHER ROYALTIES NOR FEES FOR TECHNICAL SERVICES AND HENC E SUCH INCOME COULD ONLY BE CHARACTERIZED AS BUSINESS PROFITS WHICH IN THE PRESENT CASE WAS NOT TAXABLE IN INDIA AS THE SUPPLIER HAD NO PERMANENT E STABLISHMENT IN INDIA. 6. THE AO HOWEVER DID NOT FIND MERIT IN THE SUBMISS IONS OF THE ASSESSEE AND HELD THAT THE CONSIDERATION PAID BY TH E ASSESSEE WHICH IS RESIDENT OF INDIA FOR IMPORT OF SOFTWARE ARE ROYALT Y PAYMENT AND THEREFORE WOULD CONSTITUTE INCOME CHARGEABLE UNDER THE INDIAN INCOME-TAX ACT IN THE HANDS OF RECIPIENTS THUS IT WAS OBLIGATORY ON THE PART OF THE REMITTER VIZ. THE ASSESSEE COMPANY TO DEDUCT TDS U/S. 195 OF THE ACT ON THE REMITTANCES MADE OUTSIDE. THE AO HELD THE ASSESSEE AS ASSESSEE IN DEFAULT IN RESPECT OF TAX NOT DEDUCTED AT SOURCE AS STIPULATED U/S. 195 OF THE ACT THEREFORE AS PER THE PROVISIONS OF SECTION 201 (1) OF THE ACT THE ASSESSEE FOR THE A.Y. 2008-09 WAS ASSESSEE IN DEFAU LT IN RESPECT OF TAX NOT DEDUCTED AT SOURCE FOR THE ROYALTY PAYABLE TO TELIS AMA SA FRANCE AND TELENITY USA. HE ACCORDINGLY WORKED OUT THE TAX L IABILITY OF THE ASSESSEE U/S. 201(1) OF THE ACT AT Q 1 14 58 047 AND INTEREST U/S. 201(1 A) OF THE ACT AT Q 17 38 407. 7. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY FOLLOWING THE JU DGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. SAMSUNG ELECTRONICS . NOW THE ASSESSEE IS IN APPEAL. 8. DURING THE COURSE OF HEARING THE LD. COUNSEL FO R THE ASSESSEE ALTHOUGH ADMITTED THAT THIS ISSUE STANDS COVERED AG AINST THE ASSESSEE BY ITA NO.551/BANG/11 PAGE 5 OF 16 THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT V IDE ORDER DATED 15.10.2011 IN ITA NO.2808/2005 & ORS. IN THE CASE O F M/S. SAMSUNG ELECTRONICS CO. LTD. & ORS. HOWEVER SUBMITTED THAT AGAINST THE SAID ORDER SLP IS PENDING BEFORE THE HONBLE SUPREME COURT. I T WAS FURTHER STATED THAT A SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE HONBLE DELHI HIGH COURT IN THE CASE OF DCIT V. ERRICSON A.B. NEW DELHI [2012] 204 TAXMAN 192. 9. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SU PPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) AND FURTHER SU BMITTED THAT THE PRESENT ISSUE HAD BEEN SETTLED BY THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF SAMSUNG ELECTRONICS CO. LTD. & ORS. IN ITA NO.2808/ 2005 & ORS. VIDE ORDER DATED 15.10.2011 THEREFORE THE LD. CIT(APPEALS) WAS FULLY JUSTIFIE D IN DECIDING THE ISSUE AGAINST THE ASSESSEE. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IT IS NOTICED THAT A SIMILAR ISSUE HAVING IDENTICAL FACTS WAS SUBJECT MA TTER OF ADJUDICATION BEFORE THIS BENCH OF THE TRIBUNAL IN THE CASE OF M/ S. SAMSUNG ELECTRONICS CO. LTD. & ORS. V. DCIT (INTERNATIONAL TAXATION) CIRCLE 2(1) BANG ALORE IN ITA NO.299/BANG/2011 FOR THE A.Y. 2005-06 WHEREIN V IDE ORDER DATED 22.03.2012 THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT IN ITA NO.2808/2005 & ORS. ORDER DATED 15.10.2011 AND THE RELEVANT FIN DINGS ARE GIVEN IN PARAS 7 & 8 OF THE AFORESAID REFERRED TO ORDER DATED 22.0 3.2012 WHICH READ AS UNDER: ITA NO.551/BANG/11 PAGE 6 OF 16 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N RECORD. IN THE PRESENT CASE IT IS NOT IN DISPUTE THAT IN ASSE SSEES OWN CASE IDENTICAL ISSUE HAS BEEN DECIDED BY THE HONBLE JUR ISDICTIONAL HIGH COURT AND THEIR LORDSHIPS IN THE JUDGMENT DATE D 15.10.2011 WHILE DECIDING THE ITA NO.2808/2005 & OR S. OBSERVED IN PARAS 20 TO 25 AS UNDER: 20. HAVING REGARD TO THE ABOVE SAID DEFINITION OF 'ROYALTY' WE HAVE TO CONSIDER THE CONTENTS OF SOFT WARE LICENCE AGREEMENT ENTERED INTO BY NON-RESIDENT WITH SAMSUNG ELECTRONICS AND ALSO RESPONDENTS IN THE CAS E REPRESENTED BY SRI GANESH LEARNED SENIOR COUNSEL A ND SRI ARAVIND DATTAR WHEREIN IT IS A CASE OF PURCHAS E SALE OR DISTRIBUTION OR OTHERWISE OF THE OFF-THE-SHELF S OFTWARE. IT IS DESCRIBED AS A 'SOFTWARE LICENCE AGREEMENT' WHEREIN IT IS AVERRED THAT CUSTOMER ACCEPTS AN INDIVIDUAL NON- TRANSFERABLE AND NON-EXCLUSIVE LICENCE TO USE THE LICENSED SOFTWARE PROGRAM(S) PROGAM(S) ON THE TERMS AND CONDITIONS ENUMERATED IN THE AGREEMENT. IT IS F URTHER AVERRED THAT THE CUSTOMER - SAMSUNG ELECTRONICS SHA LL PROTECT CONFIDENTIAL INFORMATION AND SHALL NOT REMO VE ANY COPYRIGHT CONFIDENTIALITY OR OTHER PROPRIETARY RIGHTS PROVIDED BY THE NON-RESIDENT. HOWEVER WHAT IS GRAN TED UNDER THE SAID LICENCE IS ONLY A LICENCE TO USE THE SOFTWARE FOR INTERNAL BUSINESS WITHOUT HAVING ANY R IGHT FOR MAKING ANY ALTERATION OR REVERSE ENGINEERING OR CREATING SUB-LICENCES. WHAT IS TRANSFERRED UNDER TH E SAID LICENCE IS THE LICENCE TO USE THE SOFTWARE AND COPY RIGHT CONTINUE TO BE WITH THE NON-RESIDENT AS PER THE AGREEMENT. EVEN AS PER THE AGREEMENT ENTERED INTO W ITH THE OTHER DISTRIBUTORS AS ALSO THE END-USER LICENCE AGREEMENT IT IS CLEAR THAT THE DISTRIBUTOR WOULD G ET EXCLUSIVE NON-TRANSFERABLE LICENCE WITHIN THE TERRI TORY FOR WHICH HE IS APPOINTED AND HE HAS GOT RIGHT TO DISTRIBUTE VIA RESELLERS THE SOFTWARE UPON PAYMENT OF THE LICENSES SET FORTH IN EXHIBIT A TO THE AGREEMEN T ONLY TO END USERS PURSUANT TO A VALID ACTUATE SHRINKWRAP OR OTHER ACTUATE LICENSE AGREEMENT AND EXCEPT AS EXPRE SSLY SET FORTH IN THE SAID AGREEMENT DISTRIBUTOR MAY NO T RENT LEASE LOAN SELL OR OTHERWISE DISTRIBUTE THE SOFTW ARE THE DOCUMENTATION OR ANY DERIVATIVE WORKS BASED UPON TH E SOFTWARE OR DOCUMENTATION IN WHOLE OR IN PART. DISTRIBUTOR SHALL NOT REVERSE ENGINEER DECOMPILE OR OTHERWISE ATTEMPT TO DERIVE OR MODIFY THE SOURCE CO DE FOR THE SOFTWARE. DISTRIBUTOR SHALL HAVE NO RIGHTS TO THE ITA NO.551/BANG/11 PAGE 7 OF 16 SOFTWARE OTHER THAN THE RIGHTS EXPRESSLY SET FORTH IN THE AGREEMENT. DISTRIBUTOR SHALL NOT MODIFY OR COPY ANY PART OF THE SOFTWARE OR DOCUMENTATION. DISTRIBUTOR MAY N OT USE SUB-DISTRIBUTORS FOR FURTHER DISTRIBUTION OF TH E SOFTWARE AND DOCUMENTATION WITHOUT THE PRIOR CONSEN T OF ACTUATE. WHAT IS CHARGED IS THE LICENCE FEE TO B E PAID BY THE DISTRIBUTOR OF THE SOFTWARE AS ENUMERATED IN EXHIBIT A TO THE AGREEMENT. FURTHER CLAUSE 6.01 OF THE AGREEMENT DEALING WITH TITLE STATES THAT THE DISTRI BUTOR ACKNOWLEDGES THAT ACTUATE AND ITS SUPPLIERS RETAIN ALL RIGHT TITLE AND INTEREST IN AND TO THE ORIGINAL A ND ANY COPIES (BY WHOMEVER PRODUCED) OF THE SOFTWARE OR DOCUMENTATION AND OWNERSHIP OF ALL PATENT COPYRIGHT TRADEMARK TRADE SECRET AND OTHER INTELLECTUAL PROP ERTY RIGHTS PERTAINING THERETO SHALL BE AND REMAIN THE SOLE PROPERTY OF ACTUATE. DISTRIBUTOR SHALL NOT BE AN OW NER OF ANY COPIES OF OR ANY INTEREST IN THE SOFTWARE BU T RATHER IS LICENCED PURSUANT TO THE AGREEMENT TO USE AND DISTRIBUTE SUCH COPIES. ACTUATE REPRESENTS THAT IT HAS THE RIGHT TO ENTER INTO THE AGREEMENT AND GRANT THE LIC ENCES PROVIDED THEREIN AND CONFIDENTIALITY IS PROTECTED. THEREFORE ON READING THE CONTENTS OF THE RESPECTIV E AGREEMENT ENTERED INTO BY THE RESPONDENTS WITH THE NON- RESIDENT IT IS CLEAR THAT UNDER THE AGREEMENT WHA T IS TRANSFERRED IS ONLY A LICENCE TO USE THE COPYRIGHT BELONGING TO THE NON-RESIDENT SUBJECT TO THE TERMS AND CONDITIONS OF THE AGREEMENT AS REFERRED TO ABOVE AN D THE NON-RESIDENT SUPPLIER CONTINUES TO BE THE OWNER OF THE COPYRIGHT AND ALL OTHER INTELLECTUAL PROPERTY RIGHT S. IT IS WELL SETTLED THAT COPYRIGHT IS A NEGATIVE RIGHT. IT IS AN UMBRELLA OF MANY RIGHTS AND LICENCE IS GRANTED FOR MAKING USE OF THE COPYRIGHT IN RESPECT OF SHRINK WRAPPED SOFTWARE/OFF-THE-SHELF SOFTWARE UNDER THE RESPECTIVE AGREEMENT WHICH AUTHORIZES THE END USER I.E. THE CUSTOMER TO MAKE USE OF THE COPYRIGHT SOFTWARE CONTAINED IN THE SAID SOFTWARE WHICH IS PURCHASED OFF THE SHELF OR IMPORTED AS SHRINK WRAPPED SOFTWARE AN D THE SAME WOULD AMOUNT TO TRANSFER OF PART OF THE COPYRI GHT AND TRANSFER OF RIGHT TO USE THE COPYRIGHT FOR INTE RNAL BUSINESS AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT. THEREFORE THE CONTENTION OF THE LEARNED SENIOR COUNSEL APPEARING FOR THE RESPONDENTS THAT T HERE IS NO TRANSFER OF COPYRIGHT OR ANY PART THEREOF UNDER THE AGREEMENTS ENTERED INTO BY THE RESPONDENT WITH THE NON- RESIDENT SUPPLIER OF SOFTWARE CANNOT BE ACCEPTED. ITA NO.551/BANG/11 PAGE 8 OF 16 21. IT IS FURTHER CONTENDED BY THE LEARNED SENIOR COUN SEL APPEARING FOR THE RESPONDENTS THAT IN VIEW OF THE F ACT THAT WHAT IS SUPPLIED BY THE NON-RESIDENT TO THE RESPONDENT IN INDIA IS ONLY A SHRINK WRAPPED SOFTWARE/OFF-THE-SHELF SOFTWARE WHICH IS NOT CUSTO MISED TO SUIT THE NEEDS OF THE RESPONDENT THE SAID SOFTW ARE IS TO BE TREATED AS GOODS AND THERE IS SALE OF THE SOF TWARE AND COPY OF THE SOFTWARE. THEREFORE THE QUESTION O F PAYING ANY ROYALTY WOULD NOT ARISE. IN SUPPORT OF T HE SAID CONTENTION THE LEARNED SENIOR COUNSEL APPEARI NG FOR THE RESPONDENTS HAS STRONGLY RELIED UPON THE DECISI ON OF THE HON'BLE SUPREME COURT IN TATA CONSULTANCY SERVICES' CASE ( SUPRA ) (HEREINAFTER REFERRED TO AS THE TCS'S CASE) WHEREIN THE HON'BLE SUPREME COURT WAS CONSIDERING THE QUESTION AS TO WHETHER THE CANNED SOFTWARE SOLD BY THE APPELLANTS CAN BE TERMED TO BE 'GOODS' AND AS SUCH ASSESSABLE TO SALES TAX UNDER T HE ANDHRA PRADESH GENERAL SALES TAX ACT 1957. HAVING REGARD TO THE BROAD DEFINITION OF 'GOODS' UNDER SEC TION 2(H) OF THE SAID ACT AND ALSO THE PROVISIONS OF ART ICLE 366(12) OF THE CONSTITUTION OF INDIA THE HON'BLE SUPREME COURT WAS PLEASED TO ANSWER THE SAID QUESTI ON FOR DETERMINATION BY HOLDING THAT ONCE THE 'INFORMA TION' OR 'KNOWLEDGE' IS TRANSFORMED INTO PHYSICAL EXISTEN CE AND RECORDED IN PHYSICAL FORM IT IS CORPOREAL PROP ERTY. THE PHYSICAL RECORDING OF THE SOFTWARE IS NOT AN INCORPOREAL RIGHT TO BE COMPREHENDED AND ACCORDINGL Y HELD THAT THE SOFTWARE MARKETED BY THE APPELLANTS T HEREIN INDISPUTABLY WAS CANNED SOFTWARE AND THUS SALE OF THE SAME WOULD ATTRACT THE PROVISIONS OF THE ANDHRA PRA DESH GENERAL SALES TAX ACT 1957. 22. THE QUESTION AS TO WHETHER THE PAYMENT MADE FOR IMPORT OF SOFTWARE OR SUPPLY OF SOFTWARE BY THE NON - RESIDENT COMPANIES WAS ROYALTY OR NOT WAS NOT AT AL L IN ISSUE IN TCS'S CASE AND THE QUESTION WAS WHETHER CA NNED SOFTWARE SOLD BY THE APPELLANTS THEREIN AMOUNTED TO SALE OF GOODS UNDER THE ANDHRA PRADESH GENERAL SALES TAX ACT. FURTHER THE ISSUE OF TRANSFER OF RIGHT TO USE THE GOODS AS PER THE EXPANDED DEFINITION OF 'SALE' DID NOT COME UP FOR CONSIDERATION IN THAT CASE. ON THE OTHE R HAND THE ISSUE IN THE PRESENT CASE IS AS TO WHETHER THE PAYMENT WOULD AMOUNT TO 'ROYALTY' WITHIN THE MEANIN G OF INCOME TAX ACT AND DTTA. IN THE SAID TCS'S CASE IT HAS BEEN HELD THAT COPYRIGHT IN COMPUTER PROGRAM MA Y REMAIN WITH THE ORIGINATOR OF THE PROGRAM BUT THE ITA NO.551/BANG/11 PAGE 9 OF 16 MOMENT COPIES ARE MADE AND MARKETED IF BECOMES GOODS WHICH ARE SUSCEPTIBLE TO TAX. THE CONTENTION OF THE ASSESSEE THAT THE CONSIDERATION RECEIVED BY THE NON- RESIDENT SUPPLIER TOWARDS THE SOFTWARE PRODUCTS WOU LD AMOUNT TO 'ROYALTY' WITHIN THE MEANING OF DTAA WITH RESPECTIVE COUNTRY WAS NOT AT ALL CONSIDERED IN THE SAID CASE. THEREFORE THE SAID DECISION IN TCS'S CASE IS NOT HELPFUL TO THE RESPONDENTS IN THE PRESENT CASES. IT IS WELL SETTLED THAT THE INTENT OF THE LEGISLATURE IN IMPOS ING SALES TAX AND INCOME TAX ARE ENTIRELY DIFFERENT AS INCOME TAX IS A DIRECT TAX AND SALES TAX IS AN INDIRECT TA X AND WHEREFORE MERE FINDING THAT THE COMPUTER SOFTWARE WOULD BE INCLUDED WITHIN THE TERM 'SALES TAX' WOULD NOT PRECLUDE THIS COURT FROM HOLDING THAT THE SAID PAYM ENTS MADE BY THE RESPONDENTS TO THE NON-RESIDENT COMPANY IN THE PRESENT CASES WOULD AMOUNT TO 'ROYALTY' UNLESS THE RESPONDENTS ARE ABLE TO PROVE THAT THE SAID PAYMENT IS FOR THE SALE OF COMPUTER SOFTWARE WHEREIN THE INCOME WOULD BE FROM THE BUSINESS AND IN THE ABSENCE OF AN Y PERMANENT ESTABLISHMENT OF THE NON-RESIDENT SUPPLIE R THERE IS NO OBLIGATION ON THE PART OF THE PAYEE TO MAKE DEDUCTION UNDER SECTION 195(1) OF THE ACT. 23. IT IS WELL SETTLED THAT IN THE ABSENCE OF ANY DEFI NITION OF 'COPYRIGHT' IN THE INCOME TAX ACT OR DTAA WITH T HE RESPECTIVE COUNTRIES IN VIEW OF CLAUSE 3 OF THE DT AA REFERENCE IS TO BE MADE TO THE RESPECTIVE LAW REGAR DING DEFINITION OF 'COPYRIGHT' NAMELY COPYRIGHT ACT 1 957 IN INDIA WHEREIN IT IS CLEARLY STATED THAT 'LITERA RY WORK' INCLUDES COMPUTER PROGRAMMES TABLES AND COMPILATIO NS INCLUDING COMPUTER [DATABASES]. SECTION 16 OF THE COPYRIGHT ACT 1957 STATES THAT NO PERSON SHALL BE ENTITLED TO COPYRIGHT OR ANY SIMILAR RIGHT IN ANY W ORK WHETHER PUBLISHED OR UNPUBLISHED OTHERWISE THAN UN DER AND IN ACCORDANCE WITH THE PROVISIONS OF THE SAID A CT OR OF ANY OTHER LAW FOR THE TIME BEING IN FORCE BUT N OTHING IN THIS SECTION SHALL BE CONSTRUED AS ABROGATING AN Y RIGHT OR JURISDICTION TO RESTRAIN A BREACH OF TRUST OR CO NFIDENCE. SECTION 14 OF THE SAID ACT DEALING WITH MEANING OF 'COPYRIGHT' READS AS FOLLOWS:- '14. MEANING OF COPYRIGHT. - FOR THE PURPOSES OF THIS ACT 'COPYRIGHT' MEANS THE EXCLUSIVE RIGHT SUBJECT TO TH E PROVISIONS OF THIS ACT TO DO OR AUTHORISE THE DOIN G OF ANY OF THE FOLLOWING ACTS IN RESPECT OF A WORK OR ANY SUBS TANTIAL PART THEREOF NAMELY: - ITA NO.551/BANG/11 PAGE 10 OF 16 ( A ) IN THE CASE OF A LITERARY DRAMATIC OR MUSICAL WO RK NOT BEING A COMPUTER PROGRAMME - ( I ) TO REPRODUCE THE WORK IN ANY MATERIAL FORM INCLUD ING THE STORING OF IT IN ANY MEDIUM BY ELECTRONIC MEANS; ( II ) TO ISSUE COPIES OF THE WORK TO THE PUBLIC NOT BEI NG COPIES ALREADY IN CIRCULATION; ( III ) TO PERFORM THE WORK IN PUBLIC OR COMMUNICATE IT TO THE PUBLIC; ( IV ) TO MAKE ANY CINEMATOGRAPH FILM OR SOUND RECORDING IN RESPECT OF THE WORK; ( V ) TO MAKE ANY TRANSLATION OF THE WORK: ( VI ) TO MAKE ANY ADAPTATION OF THE WORK ( VII )TO DO IN RELATION TO A TRANSLATION OR AN ADAPTATI ON OF THE WORK ANY OF THE ACTS SPECIFIED IN RELATION TO THE WORK IN SUB-CLAUSES ( I ) TO ( VI ); ( B ) IN THE CASE OF A COMPUTER PROGRAMME - ( I ) TO DO ANY OF THE ACTS SPECIFIED IN CLAUSE ( A ); ( II ) TO SELL OR GIVE ON COMMERCIAL RENTAL OR OFFER FOR SALE OR FOR COMMERCIAL RENTAL ANY COPY OF THE COMPUTER PROGRAMME: PROVIDED THAT SUCH COMMERCIAL RENTAL DOES NOT APPLY IN RESPECT OF COMPUTER PROGRAMMES WHERE THE PROGRAMME ITSELF IS NOT THE ESSENTIAL OBJECT OF THE RENTAL. ( C ) IN THE EASE OF AN ARTISTIC WORK - ( I ) TO REPRODUCE THE WORK IN ANY MATERIAL FORM INCLUD ING DEPICTION IN THREE DIMENSIONS OF A TWO-DIMENSIONAL WORK OR IN TWO DIMENSIONS OF A THREE-DIMENSIONAL WORK; ( II ) TO COMMUNICATE THE WORK TO THE PUBLIC: ( III ) TO ISSUE COPIES OF THE WORK TO THE PUBLIC NOT BEI NG COPIES ALREADY IN CIRCULATION; ( IV ) TO INCLUDE THE WORK IN ANY CINEMATOGRAPH FILM; ( V ) TO MAKE ANY ADAPTATION OF THE WORK; ( VI ) TO DO IN RELATION TO AN ADAPTATION OF THE WORK AN Y OF THE ACTS SPECIFIED IN RELATION TO THE WORK IN SUB-CLAUS ES ( I ) TO ( IV ); ( D ) IN THE CASE OF A CINEMATOGRAPH FILM - ( I ) TO MAKE A COPY OF THE FILM INCLUDING A PHOTOGRAP H OF ANY IMAGE FORMING PART THEREOF; ITA NO.551/BANG/11 PAGE 11 OF 16 ( II ) TO SELL OR GIVE ON HIRE OR OFFER FOR SALE OR HIR E ANY COPY OF THE FILM REGARDLESS OF WHETHER SUCH COPY HAS BE EN SOLD OR GIVEN ON HIRE ON EARLIER OCCASIONS; ( III ) TO COMMUNICATE THE FILM TO THE PUBLIC; ( E ) IN THE CASE OF A SOUND RECORDING - ( I ) TO MAKE ANY OTHER SOUND RECORDING EMBODYING IT; ( II ) TO SELL OR GIVE ON HIRE ON OFFER FOR SALE OR HIR E ANY COPY OF THE SOUND RECORDING REGARDLESS OF WHETHER SUCH C OPY HAS BEEN SOLD OR GIVEN ON HIRE ON EARLIER OCCASIONS ; ( III ) TO COMMUNICATE THE SOUND RECORDING TO THE PUBLIC. EXPLANATION .- FOR THE PURPOSES OF THIS SECTION A COPY WHICH HAS BEEN SOLD ONCE SHALL BE DEEMED TO BE A COPY ALR EADY IN CIRCULATION. IT MAY ALSO BE NOTED THAT UNDER SECTION 51 OF THE A CT DEALING WITH 'WHEN COPYRIGHT INFRINGED' STATES THAT COPYRIGHT IN A WORK SHALL BE DEEMED TO BE INFRINGED - WHEN ANY PERSON WITHOUT A LICENCE GRANTED BY THE O WNER OF THE COPYRIGHT OR THE REGISTRAR OF COPYRIGHTS UND ER THE ACT OR IN CONTRAVENTION OF THE CONDITIONS OF A LICENCE SO GRANTED OR OF ANY CONDITION IMPOSED BY A COMPETE NT AUTHORITY UNDER THE ACT: DOES ANYTHING THE EXCLUSI VE RIGHT TO DO WHICH IS BY THE ACT CONFERRED UPON THE OWNER OF THE COPYRIGHT. SECTION 52 OF THE ACT DEALING WIT H CERTAIN ACTS NOT TO BE INFRINGEMENT OF COPYRIGHT ST ATES THAT THE FOLLOWING ACTS SHALL NOT CONSTITUTE AN INFRINGEMENT OF COPYRIGHT NAMELY- XXXX ( AA ) THE MAKING OF COPIES OR ADAPTATION OF A COMPUTER PROGRAMME BY THE LAWFUL POSSESSOR OF A COPY OF SUCH COMPUTER PROGRAMME FROM SUCH COPY. ( I ) IN ORDER TO UTILISE THE COMPUTER PROGRAMME FOR THE PURPOSE FOR WHICH IT WAS SUPPLIED; OR ( II ) TO MAKE BACK-UP COPIES PURELY AS A TEMPORARY PROT ECTION AGAINST LOSS DESTRUCTION OR DAMAGE IN ORDER ONLY T O UTILISE THE COMPUTER PROGRAMME FOR THE PURPOSE FOR WHICH IT WAS SUPPLIED.' 24. IT IS CLEAR FROM THE ABOVE SAID PROVISIONS OF THE COPYRIGHT ACT THAT THE RIGHT TO COPYRIGHT WORK WOUL D ALSO CONSTITUTE EXCLUSIVE RIGHT OF THE COPYRIGHT HO LDER ITA NO.551/BANG/11 PAGE 12 OF 16 AND ANY VIOLATION OF THE SAID RIGHT WOULD AMOUNT TO INFRINGEMENT UNDER SECTION 51 OF THE ACT. HOWEVER IF SUCH COPYING OF COMPUTER PROGRAM IS DONE BY A LAWFU L POSSESSOR OF A COPY OF SUCH COMPUTER PROGRAMME THE SAME WOULD NOT CONSTITUTE INFRINGEMENT OF COPYRIGHT AND WHEREFORE BUT FOR THE LICENCE GRANTED IN THESE CAS ES TO THE RESPONDENT TO MAKE COPY OF THE SOFTWARE CONTAIN ED IN SHRINK-WRAPPED/OFF-THE-SHELF SOFTWARE INTO THE H ARD DISK OF THE DESIGNATED COMPUTER AND TO TAKE A COPY FOR BACKUP PURPOSES THE END USER HAS NO OTHER RIGHT AN D THE SAID TAKING BACKUP WOULD HAVE CONSTITUTED AN INFRINGEMENT BUT FOR THE LICENCE. THEREFORE LICEN CE IS GRANTED FOR TAKING COPY OF THE SOFTWARE AND TO STOR E IT IN THE HARD DISK AND TO TAKE A BACK UP COPY AND RIGHT TO MAKE A COPY ITSELF IS A PART OF THE COPYRIGHT. THER EFORE WHEN LICENCE TO MAKE USE OF THE SOFTWARE BY MAKING COPY OF THE SAME AND TO STORE IT IN THE HARD DISK O F THE DESIGNATED COMPUTER AND TO TAKE BACK UP COPY OF THE SOFTWARE IT IS CLEAR THAT WHAT IS TRANSFERRED IS R IGHT TO USE THE SOFTWARE AN EXCLUSIVE RIGHT WHICH THE OWNER O F THE COPYRIGHT I.E. THE RESPONDENT-SUPPLIER OWNS AND WHAT IS TRANSFERRED IS ONLY RIGHT TO USE COPY OF THE SOFTWA RE FOR THE INTERNAL BUSINESS AS PER THE TERMS AND CONDITIO NS OF THE AGREEMENT. THE DECISION OF THE DELHI HIGH COURT IN DYNAMIC VERTICAL SOFTWARE INDIA (P.) LTD.'S CASE ( SUPRA ) RELIED UPON BY SRI ARAVIND DATTAR LEARNED SENIOR COUNSEL APPEARING FOR THE RESPONDENTS IN SOME OF TH E CASES IN SUPPORT OF HIS CONTENTION THAT BY NO STRET CH OF IMAGINATION PAYMENT MADE BY THE RESPONDENTS TO THE NON-RESIDENT SUPPLIERS CAN BE TREATED AS 'ROYALTY' IS NOT HELPFUL TO THE RESPONDENTS IN THE PRESENT CASES AS IN THE SAID CASE DELHI HIGH COURT WAS CONSIDERING THE PROVISIONS OF SECTION 40(A)(I) OF THE ACT AND THE O RDER OF THE HIGH COURT READS AS FOLLOWS :- 'WHAT IS FOUND AS A MATTER OF FACT IS THAT THE AS SESSEE HAS BEEN PURCHASING THE SOFTWARE FROM MICROSOFT AND SOL D IT FURTHER IN INDIAN MARKET BY NO STRETCH OF IMAGINATI ON IT WOULD BE TERMED AS ROYALTY.' THEREFORE THE CONTENTION OF THE LEARNED SENIOR COU NSEL APPEARING FOR THE RESPONDENTS THAT THERE IS NO TRAN SFER OF ANY PART OF COPYRIGHT OR COPYRIGHT UNDER THE IMPUGN ED AGREEMENTS OR LICENSES CANNOT BE ACCEPTED. ACCORDIN GLY WE HOLD THAT RIGHT TO MAKE A COPY OF THE SOFTWARE A ND USE IT FOR INTERNAL BUSINESS BY MAKING COPY OF THE SAME AND STORING THE SAME IN THE HARD DISK OF THE DESIGN ATED ITA NO.551/BANG/11 PAGE 13 OF 16 COMPUTER AND TAKING BACK UP COPY WOULD ITSELF AMOUN T TO COPYRIGHT WORK UNDER SECTION 14(1) OF THE ACT AN D LICENCE IS GRANTED TO USE THE SOFTWARE BY MAKING CO PIES WHICH WORK BUT FOR THE LICENCE GRANTED WOULD HAVE CONSTITUTED INFRINGEMENT OF COPYRIGHT AND LICENCEE IS IN POSSESSION OF THE LEGAL COPY OF THE SOFTWARE UNDER THE LICENCE. THEREFORE THE CONTENTION OF THE LEARNED S ENIOR COUNSEL APPEARING FOR THE RESPONDENTS THAT THERE IS NO TRANSFER OF ANY PART OF COPYRIGHT OR COPYRIGHT AND TRANSACTION ONLY INVOLVES SALE OF COPY OF THE COPYR IGHT SOFTWARE CANNOT BE ACCEPTED. IT IS ALSO TO BE NOTED THAT WHAT IS SUPPLIED IS THE COPY OF THE SOFTWARE OF WHI CH THE RESPONDENT-SUPPLIER CONTINUES TO BE THE OWNER OF TH E COPYRIGHT AND WHAT IS GRANTED UNDER THE LICENCE IS ONLY RIGHT TO COPY THE SOFTWARE AS PER THE TERMS OF THE AGREEMENT WHICH BUT FOR THE LICENCE WOULD AMOUNT TO INFRINGEMENT OF COPYRIGHT AND IN VIEW OF THE LICENC E GRANTED THE SAME WOULD NOT AMOUNT TO INFRINGEMENT UNDER SECTION 52 OF THE COPYRIGHT ACT AS REFERRED T O ABOVE. THEREFORE THE AMOUNT PAID TO THE NON-RESIDE NT SUPPLIER TOWARDS SUPPLY OF SHRINK-WRAPPED SOFTWARE OR OFF-THE-SHELF SOFTWARE IS NOT THE PRICE OF THE C.D. ALONE NOR SOFTWARE ALONE NOR THE PRICE OF LICENCE GRANTED . THIS IS A COMBINATION OF ALL AND IN SUBSTANCE UNLESS LI CENCE IS GRANTED PERMITTING THE END USER TO COPY AND DOWNLOA D THE SOFTWARE THE DUMB C.D. CONTAINING THE SOFTWARE WOULD NOT IN ANY WAY BE HELPFUL TO THE END USER AS SOFTWARE WOULD BECOME OPERATIVE ONLY IF IT IS DOWNLOADED TO THE HARDWARE OF THE DESIGNATED COMPUT ER AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT AN D THAT MAKES THE DIFFERENCE BETWEEN THE COMPUTER SOFTWARE AND COPYRIGHT IN RESPECT OF BOOKS OR PRERECORDED MUSIC SOFTWARE AS BOOK AND PRERECORDED MUSIC C.D. CAN BE USED ONCE THEY ARE PURCHASED BUT SO FAR AS SOFTWAR E STORED IN DUMB C.D. IS CONCERNED THE TRANSFER OF D UMB C.D. BY ITSELF WOULD NOT CONFER ANY RIGHT UPON THE END USER AND THE PURPOSE OF THE C.D. IS ONLY TO ENABLE THE END USER TO TAKE A COPY OF THE SOFTWARE AND TO STOR E IT IN THE HARD DISK OF THE DESIGNATED COMPUTER IF LICENCE IS GRANTED IN THAT BEHALF AND IN THE ABSENCE OF LICENC E THE SAME WOULD AMOUNT TO INFRINGEMENT OF COPYRIGHT WHI CH IS EXCLUSIVELY OWNED BY NON-RESIDENT SUPPLIERS WHO WOULD CONTINUE TO BE THE PROPRIETOR OF COPYRIGHT. THEREFORE THERE IS NO SIMILARITY BETWEEN THE TRANS ACTION OF PURCHASE OF THE BOOK OR PRERECORDED MUSIC C.D. O R THE C.D. CONTAINING SOFTWARE AND IN VIEW OF THE SAM E ITA NO.551/BANG/11 PAGE 14 OF 16 THE LEGISLATURE IN ITS WISDOM HAS TREATED THE LITE RARY WORK LIKE BOOKS AND OTHER ARTICLES SEPARATELY FROM 'COMPUTER' SOFTWARE WITHIN THE MEANING OF THE 'COPYRIGHT' AS REFERRED TO ABOVE UNDER SECTION 14 O F THE COPYRIGHT ACT. 25. IT IS ALSO CLEAR FROM THE ABOVE SAID ANALYSIS OF T HE DTAA INCOME TAX ACT COPYRIGHT ACT THAT THE PAYMENT WOULD CONSTITUTE 'ROYALTY' WITHIN THE MEANING OF AR TICLE 12(3) OF THE DTAA AND EVEN AS PER THE PROVISIONS OF 9(1)( VI ) OF THE ACT AS THE DEFINITION OF 'ROYALTY' UNDER CLAUSE 9(1)( VI ) OF THE ACT IS BROADER THAN THE DEFINITION OF 'ROYALTY' UNDER THE DTAA AS THE RIGHT THAT IS TRANSFERRED IN THE PRESENT CASE IS THE TRANSFER OF COPYRIGHT INCLUDING THE RIGHT TO MAKE COPY OF SOFTWARE FOR IN TERNAL BUSINESS AND PAYMENT MADE IN THAT REGARD WOULD CONSTITUTE 'ROYALTY' FOR IMPARTING OF ANY INFORMATI ON CONCERNING TECHNICAL INDUSTRIAL COMMERCIAL OR SCI ENTIFIC KNOWLEDGE EXPERIENCE OR SKILL AS PER CLAUSE ( IV ) OF EXPLANATION 2 TO SECTION 9(1)( VI ) OF THE ACT. IN ANY VIEW OF THE MATTER IN VIEW OF THE PROVISIONS OF SECTION 90 OF THE ACT AGREEMENTS WITH FOREIGN COUNTRIES DTAA WOU LD OVERRIDE THE PROVISIONS OF THE ACT. ONCE IT IS HELD THAT PAYMENT MADE BY THE RESPONDENTS TO THE NON-RESIDENT COMPANIES WOULD AMOUNT TO 'ROYALTY' WITHIN THE MEANING OF ARTICLE 12 OF THE DTAA WITH THE RESPECTI VE COUNTRY IT IS CLEAR THAT THE PAYMENT MADE BY THE RESPONDENTS TO THE NON-RESIDENT SUPPLIER WOULD AMOU NT TO ROYALTY. IN VIEW OF THE SAID FINDING IT IS CLEA R THAT THERE IS OBLIGATION ON THE PART OF THE RESPONDENTS TO DEDUCT TAX AT SOURCE UNDER SECTION 195 OF THE ACT A ND CONSEQUENCES WOULD FOLLOW AS HELD BY THE HON'BLE SUPREME COURT WHILE REMANDING THESE APPEALS TO THIS COURT. ACCORDINGLY WE ANSWER THE SUBSTANTIAL QUEST ION OF LAW IN FAVOUR OF THE REVENUE AND AGAINST THE ASS ESSEE BY HOLDING THAT ON FACTS AND CIRCUMSTANCES OF THE C ASE THE ITAT WAS NOT JUSTIFIED IN HOLDING THAT THE AMOU NT(S) PAID BY THE RESPONDENT(S) TO THE FOREIGN SOFTWARE SUPPLIERS WAS NOT 'ROYALTY' AND THAT THE SAME DID N OT GIVE RISE TO ANY 'INCOME' TAXABLE IN INDIA AND WHEREFORE THE RESPONDENT(S) WERE NOT LIABLE TO DEDUCT ANY TAX AT SOURCE AND PASS THE FOLLOWING ORDER:- ALL THE APPEALS ARE ALLOWED. THE ORDER PASSED BY TH E INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' IMPUGNED IN THESE APPEALS IS SET ASIDE AND THE ORDE R PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ITA NO.551/BANG/11 PAGE 15 OF 16 CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICE R (TDS)-I IS RESTORED . (EMPHASIS SUPPLIED). 8. FROM THE AFORESAID REFERRED TO JUDGMENT DATED 1 5.10.2011 IN ITA NO.2808/2005 & OTHERS IT IS CRYSTAL CLEAR T HAT THE ISSUE UNDER CONSIDERATION HAS BEEN SETTLED BY THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE AND IT HAS BEEN H ELD THAT PAYMENT MADE BY THE ASSESSEE TO NON-RESIDENT COMPAN IES WOULD AMOUNT TO ROYALTY WITHIN THE MEANING OF ARTICLE 12 OF THE DTAA WITH THE RESPECTIVE COUNTRIES AND THERE WAS OBLIGAT ION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE U/S. 195 OF THE I.T. ACT. WE THEREFORE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AS SUCH WE DO NOT FIND ANY MERIT IN THIS AP PEAL OF THE ASSESSEE. 11. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS INVOLVED IN THE AFORESAID REFERRED TO CASE OF SAMSUNG ELECTRONICS CO. LTD. V. DCIT (INTERNATIONAL TAXATION) IN ITA NO.299/BANG/2011 THEREFORE RESPECTFULLY FOLLOWING THE SAID ORDER DATED 22.03.2012 PASSED BY THE ITAT A BENCH BANGALORE WE DO NOT SEE ANY MERIT IN THIS APPEAL O F THE ASSESSEE. 12. IN THE RESULT THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MARCH 2012. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 29 TH MARCH 2012. DS/- ITA NO.551/BANG/11 PAGE 16 OF 16 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.