Sandvik Machining Solution AB, (Formerly Known as) SandviK Tolling Severige AB), Pune V. Assistant Commissioner of Income-tax, (IT), Circle -2, Pune

ITA 1319/PUN/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5750 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-01-2020
• Assessment Year: 2016-2017
• Appeal Filed On: 29-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MALVIYA
• Keywords: Business income; Double taxation relief; Retrospective amendment; Advance ruling; Set aside
• Section: 90; 143(3); 142(1); 195; 201; 144C; 143(2); 264; 192

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH C , PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI S.S. VISWANETHRA RAVI, JM . / ITA NO.1 319 /PUN/201 9 / ASSESSMENT YEAR : 201 6-17 SANDVIK MACHING SOLUTIONS AB (FORMERLY KNOWN AS SANDVIK TOLLING SVERIGE AB), C/O. SANDVIC ASIA PRIVATE LIMTED, MUMBAI PUNE ROAD, DAPODI, PUNE. PAN : AA KCS4689N. . / APPELLANT V/S THE ASST. COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE 2, PUNE. . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK. REVENUE BY : SHRI ALOK MALVIYA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF ASST.COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) 2, PUNE DATED 22.07.2019 FOR THE ASSESSMENT YEAR 2016-17. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- SANDVIK TOOLING SVERIGE AB NOW KNOWN AS SANDVIK MARCHING SOLUTIONS AB IS A NON-RESIDENT (FOREIGN) COMPANY INCORPORA TED IN / DATE OF HEARING : 30.01.2020 / DATE OF PRONOUNCEMENT: 14.02.2020 2 SWEDEN. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FO R A.Y. 2016-17 ON 30.11.2016 DECLARING TOTAL TAXABLE INCOME AT RS.16,68,150/-. THE CASE WAS SELECTED FOR SCRUTINY AND T HEREAFTER NOTICES U/S 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTION NAIRE WERE ISSUED TO THE ASSESSEE. ON PERUSAL OF THE DETAILS IN RETU RN OF INCOME FURNISHED, IT WAS NOTICED THAT ASSESSEE HAD RECEIVED RS.59 ,66,099/- FROM SANDVIK ASIA PRIVATE LIMITED (SAPL) ON ACCOUNT OF IT SU PPORT SERVICES WHICH ARE RECEIPTS FOR PROVIDING RESTRICTED ACCES S TO IN HOUSE DEVELOPED PRODUCTION SYSTEMS SUCH AS GSS AND RELATED A PPLICATIONS. APART FROM THE AFORESAID RECEIPTS, ASSESSEE HAD ALSO RECE IVED LICENCE FEE, AND TECHNICAL FEE WHICH WERE OFFERED TO TAX AT 10% INC LUDING RECEIPTS OF EXPORTS AND RAW-MATERIALS. THE ASSESSEE WAS THEREAFTER ASKED TO SHOW CAUSE AS TO WHY THE TOTAL RECEIPTS SHOU LD NOT BE CONSIDERED AS TAXABLE INCOME OF THE ASSESSEE, TO WHICH AS SESSEE MADE THE SUBMISSIONS INTER-ALIA CONTENDING THAT THE IT SUPPORT SERVICE FEE IS NOT TAXABLE IN INDIA AS PER THE PROVISIONS OF DOUBLE TAXA TION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA AND SWEDEN. THE SUBM ISSIONS MADE BY THE ASSESSEE WERE NOT FOUND ACCEPTABLE TO THE AO. AO WAS OF THE VIEW THAT THE PAYMENTS RECEIVED BY THE ASSESSEE CONST ITUTE ROYALTY AND FEE FOR TECHNICAL SERVICES (FTS) AS PER SEC.9(1)(VI) AND S EC.9(1)(VII) OF THE ACT, RESPECTIVELY, AS WELL AS THE ARTICLE 12(3) OF DTAA BETWEEN INDIA AND SWEDEN. HE WAS FURTHER OF THE VIEW THAT THE S ERVICES PROVIDED BY THE ASSESSEE WERE TECHNICAL IN NATURE AND WERE TAXABLE AS FTS. HE THEREFORE CONCLUDED THAT PAYMENT RECEIVED BY T HE ASSESSEE FOR SUPPLY OF SOFTWARE AND SUPPORT SERVICES CONSTITUTING RO YALTY AND FTS IN TERMS OF DTAA AS WELL. HE ALSO NOTED THAT DISPUTE RE SOLUTION PANEL (DRP) VIDE ORDER DATED 29.09.2016 FOR A.Y. 2013-14 IN ASSESSEES OWN CASE HAD GIVEN A FINDING REGARDING IT SUPPORT SERVICE S. HE NOTED THAT THE FACTS INVOLVED IN THE YEAR UNDER CONSIDERATION A RE SIMILAR TO 3 THAT OF EARLIER YEARS AND THEREFORE THE DRP DIRECTIONS AR E ALSO APPLICABLE TO THE YEAR UNDER CONSIDERATION. HE ACCORDINGL Y HELD THAT IT SUPPORT SERVICES RECEIVED FROM SANDVIK ASIA PRIVATE LIMITED ARE TO BE ASSESSABLE TO TAX AS ROYALTY AT 10%. HE ACCORDINGLY PASSED DRAFT ASSESSMENT ORDER U/S 144C R.W.S. 143(3) OF THE ACT VIDE ORDER DT.03.10.2018 AND PROPOSED THE TOTAL ASSESSED INCOME A T RS.76,34,241/-. AGGRIEVED BY THE DRAFT ASSESSMENT ORDER OF AO DATED 03.10.2018, ASSESSEE CARRIED THE MATTER BEFORE DRP WHO VIDE DIRECTIONS ISSUED U/S 144C(5) OF THE AT DATED 27.06.2019 HELD THAT THE LICENCE FEE FOR GRANTING USER ACCESS TO SOFTWARE APPLICATION IS TO BE CONSIDERED AS ROYALTY. IT FURTHER HELD THAT THE MAINTE NANCE SERVICE TO PRODUCTION SYSTEM I.E., GSS TO SAPL IS A CONNECTED IT SUPPORT SERVICE AND THEREFORE AMOUNTS TO TAXABLE AS FTS. PURSUANT TO THE DIRECTIONS OF DRP, AO PASSED ORDER U/S 144(3) R.W.S. 144C(13) OF THE ACT VIDE ORDER DATED 22.07.2019 DETERMINING THE TOTAL TAXABLE INCOME AT RS.76,34,249/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. GROUND 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED DISPUTE RESOLUTION PANEL ('LD. DRP') AND THE LEARNE D ASSESSING OFFICER ('LD, AO') HAVE ERRED IN NOT CONSIDERING THE FAVOUR ABLE ORDER OF THE HON'BLE ITAT FOR AY 2010 - 11, 2011-12 AND 2013 - 14 IN APPELLANT'S OWN CASE PERTAINING TO THE TAXABILITY OF RECEIPTS TOWAR D IT SUPPORT SERVICES. IT IS PRAYED THAT, THE HON'BLE ITAT'S ORDER IS BIND ING ON THE LD. AO AND HENCE, THE ENTIRE ADDITION MADE BY THE LD. AO AND C ONFIRMED BY THE LD . DRP, BE DELETED. 2. GROUND 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. DRP HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN TAXING THE RECEIPTS OF INR 33,34,612 TOWARDS SERVICE COSTS FOR UPGRADAT ION OF CADI CAM AND ZEISS APPLICATION PROVIDED TO THE TOOLING DIVIS ION OF SANDVIK ASIA PRIVATE LIMITED ('SAPL') IN INDIA AS ROYALTY WITHIN THE MEANING OF ARTICLE 12 OF THE INDIA-SWEDEN DOUBLE TAXATION AVOI DANCE AGREEMENT ('DTAA') . 4 IT IS PRAYED THAT THE ADDITION MADE BY THE LD . AO AND CONFIRMED BY THE LD . DRP, BE DELETED. 3. GROUND 3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. DRP HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN TAX ING THE RECEIPTS OF INR 26,31 , 487 TOWARDS PROVISION OF MAINTENANCE SERVICES FOR PRODUCTION SYSTEM (GSS) TO THE TOOLING DIVISION OF SAPL, AS FEES FOR TECHNICAL SERVICES ('FTS') WITHIN THE MEANING OF AR TICLE 12 OF THE INDIA- SWEDEN DTAA READ WITH INDIA- PORTUGAL DTAA (VIA PRO TOCOL). IT IS PRAYED THAT THE ADDITION MADE BY THE LD . AO AND CONFIRMED BY THE LD. DRP , BE DELETED. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE ISSU E IN GROUND NO.1 IS GENERAL IN NATURE AND THEREFORE REQUIRES N O ADJUDICATION. 4. GROUNDS 2 AND 3 BEING INTER-CONNECTED ARE CONSIDERED TOGETH ER. 5. WITH RESPECT TO GROUND NOS.2 AND 3, LD.A.R. SUBMITTED TH AT IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE FOR EARLIER YE ARS BEFORE THE TRIBUNAL FOR A.YS. 2010-11, 2011-12, 2013-14 AND 2014-1 5 WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE. HE PLACED ON RECORD THE COPY OF THE AFORESAID SAID ORDERS. HE POI NTED TO THE RELEVANT FINDINGS OF THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT SINCE THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION A RE IDENTICAL TO THAT OF EARLIER YEARS, FOLLOWING THE ORDER OF TRIBUNAL IN EAR LIER YEARS, THE ISSUE BE DECIDED IN ASSESSEES FAVOUR. LD. D.R. ON THE OTH ER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL IS WITH RESPECT TO TAXABILITY OF AMOUNT RECEIVED BY THE ASSESSEE FROM SANDVIK ASIA PRIVAT E LIMITED. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR UNDER CONSIDE RATION ASSESSEE HAD RECEIVED FEES TOWARDS GRANTING USER ACCES S TO SOFTWARE 5 APPLICATION AND FOR PROVIDING IT SUPPORT FROM SAPL. BEFOR E US, BOTH THE PARTIES HAVE ADMITTED THAT THE FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THAT OF ASSESSEES OWN CA SE IN A.YS 2010- 11, 2011-12, 2013-14 AND 2014-15. WE FIND THAT THE CO-O RDINATE BENCH OF THE TRIBUNAL WHILE DECIDING THE ISSUE ON IDENTICAL FAC TS IN ASSESSEES OWN CASE IN A.Y. 2014-15 HELD THAT THE PAYMENTS R ECEIVED BY ASSESSEE FROM SAPL CANNOT BE CONSIDERED TO BE AS ROY ALTY OR FTS AND NOT TAXABLE IN INDIA. THE RELEVANT OBSERVATIONS ARE AS UNDER : 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH T HE RELEVANT MATERIAL ON RECORD. FIRSTLY, WE WILL EXAMINE THE T AXABILITY OF THE AMOUNT UNDER THE ACT. THE CLAIM OF THE ASSESSEE IS THAT T HE AMOUNT RECEIVED BY IT FROM SAPL FOR ALLOWING LIMITED ACCESS TO CAD/CAM IS A CONSIDERATION FOR COPYRIGHTED ARTICLE AND NOT USE OF A COPYRIGHT. IN THIS REGARD, IT IS OBSERVED THAT THE HONBLE DELHI HIGH COURT IN DIT V S. INFRASOFT LTD. (2014) 264 CTR 329 (DELHI) CONSIDERED ALMOST SIMILA R ISSUE IN WHICH CONSIDERATION WAS RECEIVED BY THE ASSESSEE ON GRANT OF LICENCE FOR USE OF SOFTWARE. THE AO HELD THAT THE SOFTWARE WAS LICENS ED AND NOT SOLD IN AS MUCH AS THE COPYRIGHT OF THE SOFTWARE REMAINED WITH THE ASSESSEE WHICH SIMPLY ALLOWED THE USE OF COPYRIGHT TO THE PERSON M AKING PAYMENT TO IT. IN VIEW OF THE FACT THAT THE ASSESSEE AUTHORIZED US E OF THE COPYRIGHT OF THE SOFTWARE TO CUSTOMERS IN INDIA, WHICH WAS A PAT ENTED SOFTWARE, HE HELD THAT THE CONSIDERATION FOR ALLOWING THE USE OF SUCH PATENTED SOFTWARE FELL WITHIN THE DEFINITION OF ROYALTY U/ S. 9(1)(VI) OF THE ACT. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. HOWEVER, T HE TRIBUNAL HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE UNDER THE LICEN CE AGREEMENT FOR ALLOWING THE USE OF THE SOFTWARE WAS NOT ROYALTY EI THER UNDER THE ACT OR UNDER THE DTAA. THE REVENUE APPROACHED THE HONBLE HIGH COURT, WHICH HELD THAT THE CONSIDERATION RECEIVED BY THE A SSESSEE FOR GRANT OF LICENCE FOR USE OF SOFTWARE WAS NOT TAXABLE AS ROY ALTY WITHIN THE MEANING OF ARTICLE 12(3) TO THE DTAA BETWEEN INDIA AND USA AND HENCE ACCEPTED THE ASSESSEES CLAIM ON THE BASIS OF THE R ELEVANT DTAA. 5. AU CONTRAIRE, THE HONBLE KARNATAKA HIGH COUR T IN CIT VS. SAMSUNG ELECTRONICS CO. LTD. (2012) 345 ITR 494 (KAR.) HAS HELD THAT IMPORT OF SHRINK WRAPPED SOFTWARE/OFF-THE-SHELF SOFTWARE FROM NON-RESIDENT COMPANY UNDER SOFTWARE LICENCE AGREEMENT, WHEREBY A LICENCE IS GRANTED TO THE ASSESSEE FOR TAKING COPY OF THE SOFTWARE, ST ORE THE SAME IN THE HARD DISK OF THE DESIGNATED COMPUTER AND TO TAKE A BACK UP COPY WHILE THE OWNERSHIP OF THE COPYRIGHT CONTINUES TO VEST IN THE SUPPLIER, IS NOTHING BUT ROYALTY UNDER THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT AS WELL AS UNDER ARTICLE 12 OF THE CONCERNED DTAA. THE HONBLE DELHI HIGH COURT IN INFRASOFT (SUPRA) RECORDED ITS DISSENT WIT H THE DECISION IN SAMSUNG (SUPRA) AND THE MATTER IS NOW SUB-JUDICE BE FORE THE HONBLE SUPREME COURT. 6. ON A COMPARATIVE ANALYSIS OF THE JUDGMENTS OF THE HONBLE DELHI AND THE HONBLE KARNATAKA HIGH COURT, IT TRANSPIRES THA T THE HONBLE DELHI HIGH COURT IN INFRASOFT (SUPRA) EXAMINED THE TAXABI LITY OF THE AMOUNT RECEIVED BY THE ASSESSEE ON THE TOUCHSTONE OF THE P ROVISIONS OF THE DTAA AND HELD THE SAME TO BE NOT CONSTITUTING ROYALTY. I T DID NOT SPECIFICALLY EXAMINE THE POSITION UNDER THE ACT. HOWEVER, IN PAR A 63, IT DID MENTION 6 THAT: `WHAT IS THUS REQUIRED TO BE EXAMINED IS WHE THER INCOME OF THE ASSESSEE IS ROYALTY INCOME AS COVERED BY ARTICLE 12 OF THE DTAA IF NOT THEN THE SAME WOULD BE TAXABLE AS BUSINESS INCOME A S COVERED BY THE PROVISIONS OF ARTICLE 7 OF THE DTAA. A CLOSE READ ING OF THE ABOVE PARA FAIRLY REVEALS THAT THE HONBLE HIGH COURT HELD, IN PRINCIPLE, THAT IF THE INCOME IS NOT ROYALTY, THEN IT WOULD BE TAXABLE AS A BUSINESS INCOME. SINCE IT HELD THAT THE AMOUNT IN QUESTION DID NOT C ONSTITUTE ROYALTY WITHIN THE RELEVANT DTAA, IT LAID DOWN IN PARA 95 T HAT : `WE HAVE NOT EXAMINED THE EFFECT OF THE SUBSEQUENT AMENDMENT TO SECTION 9 (1)(VI) OF THE ACT AND ALSO WHETHER THE AMOUNT RECEIVED FOR US E OF SOFTWARE WOULD BE ROYALTY IN TERMS THEREOF FOR THE REASON THAT THE ASSESSEE IS COVERED BY THE DTAA, THE PROVISIONS OF WHICH ARE MORE BENEFICI AL. IN THE OPPUGNATION, THE HONBLE KARNATAKA HIGH COURT IN SA MSUNG (SUPRA) HAS HELD: `THAT THE PAYMENT WOULD CONSTITUTE 'ROYALTY' EVEN AS PER THE PROVISIONS OF S. 9(1)(VI). 7. IT, THEREFORE, CLEARLY EMERGES THAT A COMMON THREAD WHICH RUNS THROUGH BOTH THE ABOVE JUDGMENTS IS THAT THE CONSID ERATION IS OTHERWISE NOT EXEMPT FROM TAX UNDER THE ACT. THE DISPUTE IS O NLY AS TO WHETHER IT IS BUSINESS INCOME OR ROYALTY INCOME UNDER THE ACT. WH EREAS THE HONBLE KARNATAKA HIGH COURT HELD CONSIDERATION FOR USE OF SOFTWARE AS ROYALTY INCOME U/S 9(1)(VI), THE HONBLE DELHI HIGH COURT H AD NOT EXAMINED THE EFFECT OF THE SUBSEQUENT AMENDMENT TO SECTION 9 (1) (VI) OF THE ACT. 8. AT THIS JUNCTURE, IT IS PERTINENT TO NOTE THA T THE FINANCE ACT, 2012 HAS CARRIED OUT AN AMENDMENT TO SECTION 9(1)(VI) DEALIN G WITH `INCOME BY WAY OF ROYALTY BY MEANS OF INSERTION OF EXPL. 4 W.R. E.F. 1.6.1976, WHICH READS AS UNDER: - EXPLANATION 4. FOR THE REMOVAL OF DOUBTS, IT IS HE REBY CLARIFIED THAT THE TRANSFER OF ALL OR ANY RIGHTS IN RESPECT OF ANY RIGHT, PROPERTY OR INFORMATION INCLUDES AND HAS ALW AYS INCLUDED TRANSFER OF ALL OR ANY RIGHT FOR USE OR RI GHT TO USE A COMPUTER SOFTWARE (INCLUDING GRANTING OF A LICENCE) IRRESPECTIVE OF THE MEDIUM THROUGH WHICH SUCH RIGHT IS TRANSFERR ED. 9. IT IS EVIDENT FROM A BARE PERUSAL OF THE EXPL ANATION 4, WHICH HAS BEEN INSERTED WITH RETROSPECTIVE EFFECT FROM 01-06- 1976, THAT THE TRANSFER OF ALL OR ANY RIGHTS IN RESPECT OF ANY RIGHT, PROPE RTY OR INFORMATION INCLUDES AND HAS ALWAYS INCLUDED TRANSFER OF ALL OR ANY RIGHT FOR USE OR RIGHT TO USE A COMPUTER SOFTWARE INCLUDING GRANTING OF LICENSE. WITH THIS AMENDMENT, THE LEGISLATURE HAS MADE IT OVERT AND TH AT TOO WITH RETROSPECTIVE EFFECT THAT ANY CONSIDERATION FOR THE USE OR RIGHT TO USE OF COMPUTER SOFTWARE IN ANY FORM INCLUDING A MERE GRAN TING OF A LICENSE WILL BE CONSIDERED AS ROYALTY IN THE HANDS OF RECIPIEN T U/S.9(1)(VI) OF THE ACT. THE HITHERTO CONTROVERSY ON THE TAXABILITY OF THE INCOME, AS BUSINESS INCOME OR ROYALTY INCOME, FROM ALLOWING THE USE OF COMPUTER SOFTWARE IN ANY FORM UNDER THE ACT HAS BEEN PUT TO REST BY THE LEGISLATURE BY CLEARLY ROPING IT WITHIN THE PURVIEW OF U/S 9(1)(VI) OF THE ACT. IN VIEW OF THIS RETROSPECTIVE AMENDMENT CARRIED OUT TO SECTION 9(1)( VI) ALSO COVERING THE YEAR UNDER CONSIDERATION, IT IS AXIOMATIC THAT THE AMOUNT IN QUESTION IS CHARGEABLE TO TAX UNDER THE ACT AS ROYALTY INCOME I N THE HANDS OF THE NON-RESIDENT. 10. SECTION 90(1) OF THE ACT PROVIDES THAT THE C ENTRAL GOVERNMENT MAY ENTER INTO AN AGREEMENT WITH THE GOVERNMENT OF ANY OTHER COUNTRY FOR THE GRANTING OF RELIEF OF TAX IN RESPECT OF INCOME ON W HICH TAX HAS BEEN PAID IN TWO DIFFERENT TAX JURISDICTIONS. SUB-SECTION (2) OF SECTION 90 UNEQUIVOCALLY PROVIDES THAT WHERE THE CENTRAL GOVER NMENT HAS ENTERED INTO AN AGREEMENT WITH THE GOVERNMENT OF ANY COUNTR Y OUTSIDE INDIA UNDER SUB-SECTION (1) FOR GRANTING RELIEF OF TAX OR FOR AVOIDANCE OF DOUBLE 7 TAXATION, THEN, IN RELATION TO THE ASSESSEE TO WHOM SUCH AGREEMENT APPLIES, 'THE PROVISIONS OF THIS ACT SHALL APPLY TO THE EXTENT THEY ARE MORE BENEFICIAL TO THAT ASSESSEE. CRUX OF THE SUB-SECT ION (2) IS THAT WHERE A DTAA HAS BEEN ENTERED INTO WITH ANOTHER COUNTRY, TH EN THE PROVISIONS OF THE ACT SHALL APPLY ONLY IF THEY ARE MORE BENEFICIA L TO THE ASSESSEE. IN SIMPLE WORDS, IF THERE IS A CONFLICT BETWEEN THE PR OVISIONS UNDER THE ACT AND THE DTAA, THE ASSESSEE WILL BE SUBJECTED TO THE MORE BENEFICIAL PROVISION OUT OF THE TWO. IF THE PROVISION OF THE A CT ON A PARTICULAR ISSUE IS MORE BENEFICIAL TO THE ASSESSEE VIS-A-VIS THAT IN T HE DTAA, THEN SUCH PROVISION OF THE ACT SHALL APPLY AND VICE VERSA. TH E HONBLE SUPREME COURT IN THE CASE OF CIT V. P.V.A.L. KULANDAGAN CHE TTIAR (2004) 267 ITR 654 (SC) HAS HELD THAT THE PROVISIONS OF SECTIONS 4 AND 5 ARE SUBJECT TO THE CONTRARY PROVISION, IF ANY, IN DTAA. SUCH PROVI SIONS OF A DTAA SHALL PREVAIL OVER THE ACT AND WORK AS AN EXCEPTION TO OR MODIFICATION OF SECTIONS 4 AND 5. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V. SIEMENS AKTIONG ESELLSCHAFT (2009) 310 ITR 320 (BOM.). IN THE LIGHT OF THE ABOVE DISCUSSIO N, IT BECOMES VIVID THAT IF THE PROVISIONS OF THE TREATY ARE MORE BENEFICIAL TO THE ASSESSEE VIS-A- VIS ITS COUNTERPART IN THE ACT, THEN THE ASSESSEE S HALL BE ENTITLED TO BE RULED BY THE PROVISIONS OF THE TREATY. HERE, IT IS MADE CLEAR THAT THE PROVISIONS OF SUB-SECTION (2A) OF SECTION 90 INSERT ED BY THE FINANCE ACT, 2013 ARE NOT RELEVANT TO THE ASSESSMENT YEAR 2014-1 5 UNDER CONSIDERATION AS THE SAME HAVE BEEN MADE EFFECTIVE W.E.F. 1.4.2016. 11. NOW WE TURN TO EXAMINE THE TAXABILITY OF THE AMOUNT IN THE HANDS OF THE ASSESSEE UNDER THE DTAA. RELEVANT PAR T OF ARTICLE 12 OF THE DTAA WITH SWEDEN RUNS AS UNDER: 1. ROYALTIES AND FEES FOR TECHNICAL SERVICES ARISI NG IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTH ER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (1) SUCH ROYALTIES AND FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE, AND ACCO RDING TO THE LAWS OF THAT STATE, BUT IF THE RECIPIENT IS THE BEN EFICIAL OWNER OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES, THE T AX SO CHARGED SHALL NOT EXCEED 10 PER CENT OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES. 3. (A) THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FO R THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR SCIENTIFIC WORK INCLUDING CINEMATOGRAPH FILMS, ANY PATENT, TRADE MARK, DESIGN OR MODEL, PLAN, SECRET FORMULA O R PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIA L OR SCIENTIFIC EXPERIENCE. (B) THE TERM 'FEES FOR TECHNICAL SERVICES' MEANS PA YMENT OF ANY KIND IN CONSIDERATION FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES INCLUDING THE PRO VISION OF SERVICES BY TECHNICAL OR OTHER PERSONNEL BUT DOES N OT INCLUDE PAYMENTS FOR SERVICES MENTIONED IN ARTICLES 14 AND 15 OF THIS CONVENTION. 12. PARA 2 OF THE ARTICLE 12 CLEARLY STIPULATES TH AT ROYALTY AS DEFINED IN PARA 3(A) MAY ALSO BE TAXED IN THE CONTACTING STAT E IN WHICH IT ARISES. THUS, IN ORDER TO BE GOVERNED BY PARA 2, IT IS ESS ENTIAL THAT THE RECEIPT SHOULD FIRST PASS THE TEST OF THE DEFINITION OF `R OYALTY AS GIVEN IN PARA 3 (A). ON GOING THROUGH SUCH DEFINITION, IT TRANSPIRE S THAT `ROYALTIES IS A PAYMENT OF ANY KIND RECEIVED AS A CONSIDERATION: `F OR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC O R SCIENTIFIC WORK ETC. THE 8 EXPRESSION `THE USE OF, OR THE RIGHT TO USE, ANY CO PYRIGHT HAS ALSO BEEN USED IN ARTICLE 12 OF THE DTAA BETWEEN INDIA AND TH E USA, WHICH HAS BEEN DISCUSSED IN THE CASE OF INFRASOFT (SUPRA). TH E HONBLE DELHI HIGH COURT IN THAT CASE HELD THAT WHAT WAS TRANSFERRED WAS NOT COPYRIGHT OR RIGHT TO USE COPYRIGHT BUT A LIMITED RIGHT TO USE CO PYRIGHTED MATERIAL, WHICH DID NOT GIVE RISE TO ANY ROYALTY INCOME. IT F URTHER OBSERVED THAT TO BE TAXABLE AS ROYALTY INCOME COVERED BY ARTICLE 12 OF DTAA, INCOME OF ASSESSEE SHOULD BE GENERATED BY 'USE OF OR RIGHT TO USE OF' ANY COPYRIGHT AND A LICENSE GRANTED TO LICENSEE PERMITTING HIM TO DOWNLOAD COMPUTER PROGRAMME AND STORING IT IN COMPUTER FOR HIS OWN US E IS ONLY INCIDENTAL TO FACILITY EXTENDED TO LICENSEE TO MAKE USE OF COP YRIGHTED PRODUCT FOR HIS INTERNAL BUSINESS PURPOSE. FINDING THAT THERE WAS N O TRANSFER OF ANY RIGHT IN RESPECT OF COPYRIGHT BY ASSESSEE AND IT WA S A CASE OF MERE TRANSFER OF A COPYRIGHTED ARTICLE WHILST COPYRIGHT REMAINED WITH THE OWNER, THE HONBLE HIGH COURT HELD THAT THE PAYMENT WAS FOR A COPYRIGHTED ARTICLE AND REPRESENTED PURCHASE PRICE OF AN ARTICLE AND HENCE COULD NOT BE CONSIDERED AS ROYALTY IN THE HAN DS OF THE RECIPIENT UNDER THE DTAA. 13. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSEE TRANSFERRED A LIMITED RIGHT IN THE CAD/CAM TO SAPL. THERE WAS NO TRANSFER OF COPYRIGHT OR USE OF ANY COPYRIGH T. AS AGAINST THE REQUIREMENT OF PARA 3 OF THE ARTICLE 12 FOR ROYALTY INCOME TO BE GENERATED BY USE OR RIGHT TO USE OF ANY COPYRIGHT ETC., WHAT IN THE EXTANT CASE HAS HAPPENED IS THAT THE ASSESSEE SIMPLY PERMITTED SAPL TO USE THE SOFTWARE FOR ITS LIMITED INTERNAL BUSINESS PURPOSE O NLY. NO FURTHER RIGHT WAS GRANTED TO SAPL TO DEAL WITH THE COPYRIGHT OF T HE SOFTWARE. AS THERE IS NO TRANSFER OF ANY RIGHT IN RESPECT OF THE COPYR IGHT BY THE ASSESSEE TO SAPL, GOING BY THE DEFINITION OF THE TERM `ROYALTIE S GIVEN IN ARTICLE 12 (3), THE CONSIDERATION SO RECEIVED CANNOT BE CONSTR UED AS `ROYALTIES UNDER THE DTAA. 14. THE LD. DR INVITED OUR ATTENTION TOWARDS THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN SAMSUNG (SUPRA), WH ICH ALSO CONSIDERED ARTICLE 12 OF THE DTAA BETWEEN INDIA AND THE USA AND EVENTUALLY HELD THAT THE PAYMENT FOR USE OF SOFTWAR E CONSTITUTED ROYALTY UNDER THE DTAA. 15. THE ASSESSEE UNDER CONSIDERATION IS NOT GOV ERNED BY THE JURISDICTION OF THE HONBLE KARNATAKA HIGH COURT. T HE HONBLE SUPREME COURT IN CIT VS. VEGETABLE PRODUCTS LTD. (1973) 88 ITR 192 (SC) HAS HELD THAT WHEN TWO INTERPRETATIONS ARE POSSIBLE, ORDINAR ILY THE COURT WOULD INTERPRET THE PROVISION IN FAVOUR OF A TAX-PAYER, A ND AGAINST THE REVENUE. SIMILAR VIEW HAS BEEN REITERATED IN A SERIES OF JUDG MENTS INCLUDING MANISH MAHESHWARI VS. ACIT (2007) 289 ITR 341 (SC) . AS THE VIEW TAKEN BY THE HONBLE DELHI HIGH COURT IN INFRASOFT (SUPRA) IS IN FAVOUR OF THE ASSESSEE, WE FOLLOW THE SAME AND THAT IS MORE S O FOR THE RAISON D`ETRE THAT THE TRIBUNAL IN ITS ORDER DATED 29-03- 2019 IN ITA NOS. 195 TO 197/PUN/2017 IN THE ASSESSEES OWN CASE FOR THE A.Y RS. 2010-11, 2011-12 AND 2012-13 HAS ALSO DECIDED SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. 16. HERE IT IS ESSENTIAL TO MENTION THAT UNLIKE THE INSERTION OF EXPLANATION 4 TO SECTION 9(1)(VI) ENGULFING CONSIDE RATION FOR USE OF SOFTWARE IN ANY FORM WITHIN THE AMBIT OF `ROYALTY, THERE IS NO CORRESPONDING AMENDMENT IN THE DTAA AND HENCE THE D TAA, IN THE ABSENCE OF THE APPLICABILITY OF SECTION 90(2A) TO T HE YEAR UNDER CONSIDERATION, WOULD NOT AUTOMATICALLY IMBIBE THE C HANGES MADE IN THE ACT. WE HAVE NOTICED ABOVE THAT IF THE PROVISIONS OF DTAA ARE MORE BENEFICIAL TO THE ASSESSEE THEN THOSE WOULD APPLY I N SUPERSESSION OF THE PROVISIONS OF THE ACT. IT IS, THEREFORE, HELD THAT THE SUM OF RS.1.48 CRORE AND ODD CANNOT BE CONSTRUED AS `ROYALTIES IN THE H ANDS OF THE ASSESSEE 9 AS PER THE MANDATE OF ARTICLE 12 OF THE DTAA. IT I S RELEVANT TO NOTE THAT THE ASSESSEE SPECIFICALLY STATED BEFORE THE AO THAT IT DID NOT HAVE ANY PE IN INDIA AND FURTHER IT IS NOT THE CASE OF THE AO T HAT THE ASSESSEE HAS ANY PE IN INDIA, SO AS TO WARRANT THE CONSIDERATION OF THE AMOUNT IN QUESTION AS BUSINESS PROFITS UNDER ARTICLE 7 OF THE DTAA. 17. THE SECOND ISSUE IS TREATMENT OF A SUM OF RS .38,97,417/- WHICH WAS RECEIVED BY THE ASSESSEE FROM SAPL FOR PROVIDIN G MAINTENANCE SERVICES IN RESPECT OF GSS SOFTWARE. THE AO HELD T HIS AMOUNT TO BE IN THE NATURE OF FEES FOR TECHNICAL SERVICES U/S.9(1 )(VII) OF THE ACT AND ALSO UNDER THE DTAA. HE, THEREFORE, INCLUDED IT IN THE TOTAL INCOME OF THE ASSESSEE. THE DRP UPHELD THE DECISION OF THE AO IN THE DRAFT ORDER, AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BE FORE THE TRIBUNAL. 18. HAVING HEARD BOTH THE SIDES AND GONE THROUG H THE RELEVANT MATERIAL ON RECORD, WE FIRST NEED TO PRECISELY ASCE RTAIN THE NATURE OF SERVICE FOR WHICH THE INSTANT CONSIDERATION WAS REC EIVED. NO AGREEMENT WAS PRODUCED BEFORE US TO DEMONSTRATE THE NATURE OF RECEIPT. ON A SPECIFIC QUERY, THE LD. AR STATED THAT THE PAYMENT WAS RECEIVED FOR MAINTENANCE OF THE EXISTING SOFTWARE WITH SAPL, WHI CH WAS NOT CONTROVERTED. ALBEIT A FEEBLE ATTEMPT WAS MADE FOR SHOWING THAT THE AMOUNT WAS ALSO TOWARDS GIVING ACCESS TO THE GSS SO FTWARE, BUT THE ASSESSEE COULD NOT SUBSTANTIATE THE SAME WITH ANY C OGENT EVIDENCE OR MATERIAL. EVEN THE CONCERNED INTERNATIONAL TRANSACT ION HAS ALSO BEEN REPORTED BY THE ASSESSEE AS `GSS MAINTENANCE CHARGE S. THUS, IT TURNS OUT THAT THE ASSESSEE RECEIVED RS.38.97 LAKH FROM S APL NOT FOR GIVING ACCESS TO ANY SOFTWARE BUT ONLY FOR MAINTENANCE OF EXISTING SOFTWARE. 19. THE AO HAS TREATED SUCH AMOUNT IN THE NATURE OF FEES FOR TECHNICAL SERVICES. SECTION 9(1)(VII) OF THE ACT DEFINES TH E TERM FEES FOR TECHNICAL SERVICES AS PER EXPLANATION 2 AS UNDER :- `FOR THE PURPOSES OF THIS CLAUSE, 'FEES FOR TECHNIC AL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CON SIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR C ONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TE CHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR A NY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDE RTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD 'SALARIES'. 20. ON GOING THROUGH THE ABOVE EXPLANATION, IT IS PATENTLY DECIPHERED THAT ANY CONSIDERATION, INTER ALIA, FOR RENDERING T ECHNICAL OR CONSULTANCY SERVICES, WHICH IS NOT IN THE NATURE OF CONSTRUCTIO N, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKING BY THE RECIPIENT, CONSTITU TES FEES FOR TECHNICAL SERVICES. WHEN WE APPLY THE MANDATE OF THE EXPLANA TION 2 TO THE FACTUAL PANORAMA OBTAINING BEFORE US, IT CLEARLY EM ERGES THAT WHAT THE ASSESSEE RECEIVED IS CONSIDERATION FOR MAINTENANCE OF THE EXISTING SOFTWARE WITH SAPL WHICH OBVIOUSLY INVOLVES USE OF TECHNICAL KNOWLEDGE AND IS NOTHING SHORT OF FEES FOR TECHNICAL SERVICES IN THE NATURE OF TECHNICAL OR CONSULTANCY SERVICES. THUS, THE AMOUN T IN QUESTION CONSTITUTES INCOME OF THE RECIPIENT-ASSESSEE U/S.9( 1)(VII) OF THE ACT. 21. NOW WE TURN TO EXAMINE THE POSITION UNDER T HE DTAA. WE HAVE REPRODUCED ABOVE THE RELEVANT PARTS OF THE ARTICLE 12 BETWEEN INDIA AND SWEDEN. PARA 3(B) OF THE ARTICLE 12 DEFINES THE EXP RESSION FEES FOR TECHNICAL SERVICES TO MEAN PAYMENT OF ANY KIND IN CONSIDERATION FOR RENDERING OF MANAGERIAL, TECHNICAL OR CONSULTANCY S ERVICES INCLUDING THE PROVISION OF SERVICES BY TECHNICAL OR OTHER PERSONN EL. IN SO FAR AS THE RENDERING OF TECHNICAL OR CONSULTANCY SERVICES TO C ONSTITUTE FEES FOR TECHNICAL SERVICES UNDER PARA 3(B) IS CONCERNED, W E FIND THAT THE 10 DEFINITION OF THE TERM FEES FOR TECHNICAL SERVICES IN THE DTAA TO THAT EXTENT IS ALMOST SIMILAR TO THAT CONTAINED IN EXPLAN ATION 2 TO SECTION 9(1)(VII). HOWEVER, AT THIS STAGE, IT IS PERTINENT TO NOTE THE TERMS OF THE PROTOCOL WITH REFERENCE TO ARTICLE 12 OF THE DTAA, WHICH PROVIDES THAT : `IF UNDER ANY CONVENTION, AGREEMENT OR PROTOCOL BETWEEN INDIA AND A THIRD STATE WHICH IS A MEMBER OF THE OECD, INDIA LIMITS IT S TAXATION AT SOURCE ON DIVIDENDS, INTEREST, ROYALTIES OR FEES FOR TECHN ICAL SERVICES TO A RATE LOWER OR A SCOPE MORE RESTRICTED THAN THE RATE OR S COPE PROVIDED FOR IN THIS CONVENTION ON THE SAID ITEMS OF INCOME, THE SA ME RATE OR SCOPE AS PROVIDED FOR IN THAT CONVENTION, AGREEMENT OR PROTO COL ON THE SAID ITEMS OF INCOME SHALL ALSO APPLY UNDER THIS CONVENTION. THIS IS IN THE NATURE OF THE MOST FAVOURED NATION (MFN) CLAUSE IN THE DTAA B ETWEEN INDIA AND SWEDEN WHICH SEEKS TO PROVIDE THAT IF INDIA HAS LIM ITED, INTER ALIA, ITS SCOPE OF FEES FOR TECHNICAL SERVICES IN A DTAA WITH ANY OTHER OECD COUNTRY, THEN SUCH LIMITED SCOPE SHALL STAND SUBSTI TUTED IN THE DTAA WITH SWEDEN. PORTUGUESE REPUBLIC IS A MEMBER OF T HE OECD WITH WHICH INDIAN HAS ENTERED INTO A DTAA. THE RELEVANT PART OF THE TERM FEES FOR INCLUDED SERVICES HAS BEEN DEFINED IN THE ARTICLE 12(4) OF THE DTAA BETWEEN INDIA AND PORTUGUESE, WHICH IS AS UNDER : - `FOR THE PURPOSES OF THIS ARTICLE 'FEES FOR INCLUDE D SERVICES' MEANS PAYMENTS OF ANY KIND, OTHER THAN THOSE MENTIO NED IN ARTICLES 14 AND 15 OF THIS CONVENTION, TO ANY PERSO N IN CONSIDERATION OF THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THROUGH THE PROVISIONS OF SERVI CES OF TECHNICAL OR OTHER PERSONNEL) IF SUCH SERVICES:.(B ) MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, K NOW-HOW OR PROCESSES OR CONSIST OF THE DEVELOPMENT AND TRANSFE R OF A TECHNICAL PLAN OR TECHNICAL DESIGN WHICH ENABLES TH E PERSON ACQUIRING THE SERVICES TO APPLY THE TECHNOLOGY CONT AINED THEREIN. 22. A CAREFUL CIRCUMSPECTION OF THE RELEVANT PAR T OF THE DEFINITION OF THE EXPRESSION FEES FOR INCLUDED SERVICES IN ARTICLE 12 OF THE DTAA WITH PORTUGUESE DISCLOSES THAT ANY CONSIDERATION TO QUAL IFY AS FEES FOR INCLUDED SERVICES MUST NECESSARILY RESULT INTO MAKI NG AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE OR SKILL ETC. TO THE RECIPIEN T OF THE SERVICE. THE TERM MAKE AVAILABLE HAS BEEN JUDICIALLY INTERPRET ED BY THE HONBLE KARNATAKA HIGH COURT IN CIT VS. DE BEERS INDIA MINE RALS PVT. LTD. (2012) 346 ITR 467 (KAR.) HOLDING THAT THE PAYER OF THE SE RVICES SHOULD BE ABLE TO UTILISE THE ACQUIRED KNOWLEDGE OR KNOWHOW AT HIS OWN IN FUTURE WITHOUT THE AID OF SERVICE PROVIDER. THE AUTHORITY FOR ADVANCE RULING IN PRODUCTION RESOURCES GROUP, IN RE (2018) 401 ITR 5 6 AAR HAS ALSO HELD THAT MAKE AVAILABLE CONNOTES SOMETHING WHICH RESU LTS IN TRANSMITTING THE TECHNICAL KNOWLEDGE SO THAT THE RECIPIENT COULD DERIVE AN ENDURING BENEFIT AND UTILISE THE SAME IN FUTURE ON HIS OWN W ITHOUT THE AID AND ASSISTANCE OF THE PROVIDER. ON GOING THROUGH THE A BOVE INTERPRETATION, IT BECOMES PALPABLE THAT IN ORDER TO `MAKE AVAILABLE TECHNICAL SERVICES, IT IS SINE QUA NON THAT THE RECIPIENT OF THE SERVICES MUST ACQUIRE SUCH TECHNICAL KNOW-HOW ETC. WHICH HE CAN HIMSELF USE IN FUTURE WITHOUT ANY ASSISTANCE OF THE PROVIDER AND THE SAME IS NOT ANY SUCH ACT OR SERVICE WHICH VANISHES OR DISAPPEARS ON ITS PROVISION BY TH E PAYEE ITSELF. 23. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT IS FOUND THAT THE TECHNICAL SERVICES PROVIDED BY THE ASSESSEE FOR MAI NTENANCE OF THE EXISTING GSS SOFTWARE SUPPLIED TO SAPL AMOUNTS TO R ENDERING OF TECHNICAL OR CONSULTANCY SERVICES SIMPLICITOR WITHO UT `MAKING AVAILABLE ANY TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW-HO W OR PROCESSES ETC. TO SAPL FOR USE IN FUTURE INDEPENDENTLY. IN OTHER WORD S, IT IS A SIMPLE CASE OF PROVIDING SERVICES INVOLVING TECHNICAL KNOWLEDGE WHICH EXHAUSTED 11 WITH ITS PROVISION ITSELF. SINCE SUCH SERVICES DID NOT RESULT INTO PROVISION OF ANY TECHNICAL KNOWLEDGE, EXPERIENCE OR SKILL ET C. TO SAPL, WE ARE SATISFIED THAT THE CONSIDERATION SO RECEIVED BY THE ASSESSEE CANNOT BE CATEGORIZED AS FEES FOR TECHNICAL SERVICES IN TER MS OF DTAA. GOING BY THE BENEFICIAL PROVISION IN THE DTAA VIS--VIS THE ACT, THIS AMOUNT IS DIRECTED NOT TO BE CONSIDERED AS FEES FOR TECHNICAL SERVICES. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN ITS AFORE-REFERRE D ORDER IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS. FURTHER, IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS ANY PERMANENT ESTABLIS HMENT IN INDIA, SO AS TO NECESSITATE THE CONSIDERATION OF THE ASPECT O F ITS TAXABILITY AS BUSINESS PROFITS UNDER ARTICLE 7 OF THE DTAA. 7. BEFORE US, REVENUE HAS NEITHER POINTED OUT ANY DISTINGU ISHING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT OF EAR LIER YEARS I.E., 2010-11, 2011-12, 2013-14 & 2014-15. FURTHER, NO MATE RIAL HAS BEEN PLACED BY REVENUE TO DEMONSTRATE THAT THE ORDER OF TR IBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2014-15 HAS SET ASIDE / S TAYED BY HIGHER JUDICIAL FORUM. WE THEREFORE, FOLLOWING THE DECISION OF THE TR IBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2014-15 AND FOR SIMILAR REASO NS HOLD THAT THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM SANDVIK ASIA PRIVATE LIMITED (SAPL) CANNOT BE CONSIDERED AS ROYALTY OR FTS AND THEREFORE NOT TAXABLE IN INDIA. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 14 TH DAY OF FEBRUARY, 2020. SD/- SD/- ( S.S. VISWANETHRA RAVI) ( ANIL CHATURVEDI ) & / JUDICIAL MEMBER '& / ACCOUNTANT MEMBER PUNE; DATED : 14 TH FEBRUARY, 2020. YAMINI 12 ()*+,-, * / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A) 13, PUNE. PR.CIT-5, PUNE. '#$ %%&',) &', / DR, ITAT, C PUNE; $+,-/ GUARD FILE. / BY ORDER , / / TRUE COPY / / ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.