BIGTREE ENTERTAINMENT P. LTD, MUMBAI V. DCIT 8(1), DCIT 8(1)

ITA 2098/MUM/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4530 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Double taxation relief; Bonafide belief; Permanent establishment; Condonation of delay; Reason to believe; TDS
• Section: 143(3); 195; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.2098/M/2016 ASSESSMENT YEAR: 2011-12 M/S. BIGTREE ENTERTAINMENT PVT. LTD., GROUND FLOOR, PLOT NO.54, WAJEDA HOUSE, GULMOHAR ROAD, 7 JUHU SCHEME, MUMBAI-400 039 PAN: AABCB 3428P VS. DY. CIT 8(1), MUMBAI (APPELLANT) (R ESPONDENT) ITA NO.3095/M/2018 ASSESSMENT YEAR: 2012-13 M/S. BIGTREE ENTERTAINMENT PVT. LTD., GROUND FLOOR, WAGEDA HOUSE, GULMOHAR X ROAD NO.7, NEAR TIAN RESTAURANT, JUHU SCHEME, MUMBAI-400 049 PAN: AABCB 3428P VS. INCOME TAX OFFICER 8(1)(2), MUMBAI (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI N.R. AGRAWAL, A.R. SHRI NISCHAL AGRAWAL, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. DATE OF HEARING : 20.02.2019 DATE OF PRONOUNCEMENT : 14.03.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED TWO APPEALS HAVE BEEN PREFERRED B Y THE ASSESSEE AGAINST THE ORDER DATED 18.01.2016 OF THE ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 2 COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12 & 2 012-13. 2. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S UBMITTED BEFORE THE BENCH THAT ASSESSEE HAS RECEIVED THE DEF ECT MEMO DATED 31.10.2017 WHICH WAS REPLIED ON 21.11.2017 ST ATING THAT THE DATE OF RECEIPT OF LD. CIT(A)S ORDER WAS WRONG LY STATED IN THE MEMORANDUM OF APPEAL IN FORM NO.36. THE LD. A.R. S UBMITTED THAT LD. CIT(A)S ORDER DATED 18.01.2016 WAS RECEIV ED BY THE ASSESSEE ON 17.02.2016 AND APPEAL WAS FILED ON 31.0 3.2016 BUT THE DATE WAS WRONGLY MENTIONED AS 18.01.2016. HOWE VER, THE ASSESSEE FILED A COMMON MEMORANDUM OF APPEAL IN FOR M NO.36 FOR A.Y. 2011-12 & 2012-13 ON THE WRONG BELIEF THAT SINCE THE ORDER OF LD. CIT(A) IS COMMON FOR BOTH THE YEARS, A PPEALS HAVE TO BE FILED BY WAY OF SINGLE MEMORANDUM OF APPEAL. THI S WAS DONE UNDER PROFESSIONAL ADVICE OF THE ASSESSEES COUNSEL AND THE FILING OF APPEALS FOR BOTH THE YEAR WAS DONE ACCORDINGLY. THEREAFTER, WHEN THE DEFECT WAS POINTED, THE SAME WAS RECTIFIED BY FILING THE TWO MEMORANDUM OF APPEALS. WHEN THE ASSESSEE GOT A DEFECT MEMO DATED 31.05.2018 FOR A.Y. 2012-13 STATING THAT THERE IS A DELAY OF 754 DAYS WHICH WAS REPLIED BY THE ASSESSEE ON 04.06.2018 FILING THEREWITH THE AFFIDAVIT OF THE DI RECTOR MR. PARIKSHITDAR STATING THE VARIOUS FACTS. THE LD. A. R. THEREFORE SUBMITTED THAT IN THE ORIGINAL MEMORANDUM OF APPEAL FILED FOR BOTH THE YEARS, THERE WAS NO DELAY THOUGH THE SAME WAS FILED COMMON IN BOTH THE YEARS WHICH WAS SUBSEQUENTLY UPO N BEING POINTED OUT BY THE REGISTRY BY WAY OF DEFECT OF MEM O WAS CORRECTED AND THUS WHATEVER DELAY HAS HAPPENED WAS ONLY DUE TO THE WRONG ADVICE OF THE COUNSEL OF THE ASSESSEE NONETHELESS THE MEMORANDUM OF APPEAL WAS FILED WELL WITHIN THE TIME. THE ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 3 LD. A.R. THEREFORE PRAYED BEFORE THE BENCH THAT THE RE IS NO DELAY IN FILING THE APPEAL BUT IF AT ALL THE SAID MISTAKE IS CONSIDERED TO BE LATE FILING OF APPEAL THE SAME MAY KINDLY BE CON DONED IN THE INTEREST OF JUSTICE AS THE REASONS ATTRIBUTABLE FO R THE SAID FILING WERE BEYOND THE UNDERSTANDING OF THE ASSESSEE AND A SSESSEE ACTED ON THE ADVICE OF THE COUNSEL. THE LD. D.R., O N THE OTHER HAND, OBJECTED TO THE SUBMISSIONS OF THE LD. A.R. A ND SUBMITTED THAT BOTH THE APPEALS OF THE ASSESSEE MAY BE DISMIS SED. 3. HAVING HEARD RIVAL SUBMISSIONS OF BOTH THE PARTI ES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE A SSESSEE HAS FILED THE CONSOLIDATED APPEAL MEMORANDUM WELL WITHI N THE TIME BUT INSTEAD OF FILING THE APPEALS FOR TWO YEARS SEP ARATELY ONLY ONE MEMORANDUM OF APPEAL WAS FILED. THE GROUNDS OF APPEAL FOR BOTH THE YEARS WERE ATTACHED THEREWITH WHICH IS APP ARENTLY WRONG AND THAT TOO APPEARS TO BE AN INADVERTENT MIS TAKE ON THE PART OF THE COUNSEL OF THE ASSESSEE WHO ACTED ON TH E BELIEF THAT SINCE THERE IS A COMMON ORDER FOR TWO YEARS BY LD. CIT(A), THE SAME CAN BE CHALLENGED BY WAY OF SINGLE MEMORANDUM OF APPEAL BEFORE THE TRIBUNAL. UNDER THESE FACTS AND CIRCUMS TANCES OF THE CASE, WE ARE OF THE VIEW THAT THERE IS NO DELAY IN FILING THE APPEAL BY THE ASSESSEE IN FACT FILED APPEALS ARE WELL IN T IME BUT WRONGLY FILED IN ONE MEMORANDUM OF APPEAL INSTEAD OF TWO WH ICH WAS LATER ON RECTIFIED. THEREFORE, ORIGINAL DATE OF FI LING OF APPEAL HAS TO BE TAKEN AND TREATED AS DATE OF ORIGINAL FILING . THEREFORE, IN OUR CONSIDERED VIEW THERE IS NO DELAY IN FILING THE APPEAL AND THE APPEALS ARE DECIDED THE ACCORDINGLY. 4. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE DISALLOWANCE OF RS.74,18, 078/- UNDER ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 4 SECTION 40(A)(I) OF THE ACT FOR NON DEDUCTION OF TA X AT SOURCE UNDER SECTION 195 OF THE ACT. IN THE SECOND YEAR A LSO THE IDENTICAL ISSUE IS INVOLVED CHALLENGING THE DISALLO WANCE OF RS.77,70,635/- FOR NON DEDUCTION OF TAX UNDER SECTI ON 195 OF THE ACT. 5. THE FACTS IN BRIEF ARE THAT THE AO DURING THE CO URSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE HAS P URCHASED SOFTWARE AMOUNTING TO RS.74,18,078/- DURING FINANCI AL YEAR 2010-11 AND RS.77,70,635/- IN FINANCIAL YEAR 2012-1 3. THE SAID SOFTWARES WERE PURCHASED FROM VISTA ENTERTAINME NT SOLUTION PVT. LTD., NEW ZEALAND IN PURSUANCE OF SOF TWARE DISTRIBUTORSHIP AGREEMENT. ACCORDING TO THE ASSESS EE NO TAX WAS DEDUCTABLE AT SOURCE ON THE PURCHASE OF SOFTWAR ES FROM THE SAID COMPANY. HOWEVER, ACCORDING TO THE AO, THE SA ID TRANSACTION IS ROYALTY AND THEREFORE LIABLE FOR TDS AT SOURCE. ACCORDINGLY, AO ISSUED SHOW CAUSE NOTICE TO THE ASS ESSEE AS TO WHY THE SAME SHOULD NOT BE DISALLOWED BY INVOKING P ROVISIONS OF SECTION 40(A)(I) READ WITH SECTION 195 OF THE ACT A ND EXPLANATION 2 TO SECTION 9 SUB SECTION (1) CLAUSE (VI) OF THE A CT WHICH WAS REPLIED BY THE ASSESSEE VIDE WRITTEN SUBMISSION DAT ED 25.10.2013 IN A.Y. 2011-12 CONTENDING THAT SOFTWARE PURCHASED FROM VISTA ENTERTAINMENT SOLUTION PVT. LTD., NEW ZEA LAND FALLS UNDER THE DEFINITION OF GOODS AS PAYMENT WAS MADE B Y THE ASSESSEE ON ACCOUNT OF SOFTWARE PURCHASED AND THERE FORE NO TAX IS REQUIRED TO BE TAXED AT SOURCE. ON THE APPLICAB ILITY OF SECTION 9 SUB SECTION (1) CLAUSE (VI) EXPLANATION 2 THE AS SESSEE SUBMITTED THAT PAYMENT WAS MADE FOR COPYRIGHT, PATE NT, DESIGNS, SECRET FORMULA OR PROCESS OR TRADE MARKS O R SIMILAR PROPERTIES CAN NOT BE REGARDED AS ROYALTY. THE LD. A.R. ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 5 SUBMITTED BEFORE THE AO THAT THE CONSIDERATION IS P AID FOR PURCHASE OF GOODS AND NOT AS ROYALTY. THE LD. A.R. ALSO SUBMITTED BEFORE THE AO THAT IN A.Y. 2007-08 THE LD . CIT(A) IN ASSESSEES OWN CASE HAS ALLOWED THE APPEAL BY HOLDI NG THAT PAYMENT MADE TO VISTA ENTERTAINMENT SOLUTION PVT. LT D., NEW ZEALAND WAS FOR A PURCHASE OF COPYRIGHT ITSELF AND THUS THERE IS NO TRANSFER OF ANY PART OF THE COPYRIGHT AND THEREF ORE THE PAYMENT DOES NOT AMOUNT TO ROYALTY. THE LD. CIT(A) ALSO OBSERVED IN THE ORDER PASSED FOR A.Y. 2007-08 THAT THE SAID COMPANY DOES NOT HAVE ANY PERMANENT ESTABLISHMENT I N INDIA AND HENCE IMPUGNED PAYMENT SHALL NOT BE CONSIDERED AS BUSINESS PROFIT OF THE SAID COMPANY UNDER ARTICLE 7 OF DTAA AND WOULD NOT BE CHARGEABLE TO TAX IN NEW ZEALAND IN AB SENCE OF ANY PE IN INDIA. THEREFORE, IT WAS HELD THAT THE SAID PAYMENT CAN NOT BE TAXED IN INDIA AS ROYALTY NOR AS BUSINESS IN COME OF THE SAID COMPANY. THE SUBMISSION OF THE AO DID NOT FIN D FAVOUR WITH THE AO AND HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE UNDER SECTION 40(A)(I) READ WITH SECTION 1 95 BY HOLDING THAT BY VIRTUE OF SOFTWARE DISTRIBUTORSHIP AGREEMEN T ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE FROM PAYMENT TO NO N RESIDENT FOR THE SOFTWARE FOR SUPPLYING/INSTALLING IN THE INDIAN MARKET AND THUS THE ASSESSEE AGREED THAT IT HAS ONLY RIGHT S TO INSTALL THE SOFTWARE AS A RESULT OF ACQUIRING IT FROM THE S AID NON RESIDENT. THE AO ALSO NOTED THAT UPON ANALYSIS OF DTAA BETWEEN INDIA AND NEW ZEALAND, THE INCOME TAX ACT A ND COPYRIGHT ACT, PAYMENT MADE/PAYABLE BY THE ASSESSEE TO NON RESIDENT WOULD CONSTITUTE ROYALTY WITHIN THE MEANIN G OF DTAA AND THE PROVISION OF SECTION 9(1)(VI) OF THE ACT. ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 6 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A), AF TER FOLLOWING THE DECISION OF DDIT VS. RELIANCE COMMUNICATION LTD . IN ITA NO.837/M/2007 & 5080/M/2008 (119 APPEALS), CAME TO THE CONCLUSION THAT PAYMENT MADE TO VISTA ENTERTAINMENT SOLUTION PVT. LTD., NEW ZEALAND AMOUNTING TO RS.74,18,078/- IN ASSESSMENT YEAR 2011-12 IS TAXABLE AS ROYALTY UNDER SECTION 9(1)(VI) AND DTAA BETWEEN INDIA AND NEW ZEALAND AN D THEREFORE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE THEREBY UPHOLDING THE ORDER OF AO BY DISMISSING THE APPEAL OF THE ASSESSE E. 7. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT ASSESSEE HAS PURCHASED ONLINE SOFTWARE FROM VISTA ENTERTAINME NT SOLUTION PVT. LTD., NEW ZEALAND FOR SELLING THE SAM E TO VARIOUS CUSTOMERS ALL OVER INDIA WHICH IS USED BY CINEMA TH EATRES FOR ONLINE BOOKING OF TICKETS. THE LD. A.R. SUBMITTED THAT THE SAID PAYMENT FOR THE PURCHASE OF SOFTWARE IS NOT COVERED BY THE PROVISIONS OF SECTION 40(A)(I) OF THE ACT. THE LD. A.R. SUBMITTED THAT LD. CIT(A) HAS CONFIRMED THE ORDER OF AO ON TH IS ISSUE BY FOLLOWING THE DECISION OF DDIT VS. RELIANCE COMMUNI CATIONS LTD. & ORS. IN ITA NO.837/M/2007 & 5080/M/2008 (119 APPE ALS) WHICH STOOD RECALLED IN MA VIDE ORDER DATED 18.11.2 016. THE LD. A.R. SUBMITTED THAT SOFTWARE IS COMMODITY/GOODS AND THE FOREIGN SUPPLIER HAS NO PE IN INDIA, HENCE PROVISI ONS OF SECTION 195 ARE NOT APPLICABLE AS HAS BEEN HELD OR DECIDED BY THE APEX COURT IN THE CASE OF TATA CONSULTANCY SERVICES PVT. LTD. VS. STATE OF ANDHRA PRADESH (2004) 271 ITR 401(SC). THE ASSE SSEE ALSO CLARIFIED THAT THOUGH THE DECISION HAS BEEN PASSED BY THE APEX COURT IN THE CONTEXT OF SALES TAX BUT SAME HAS BEEN FOLLOWED BY LD. CIT(A) IN VINJAS SOLUTION INDIA PVT. LTD. 98 CCH 014 MADRAS ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 7 AND ACIT VS. SONATA INFORMATION TECH. LTD., MUMBAI 152 TTJ 0590 BY RELYING UPON THE DECISION OF TATA CONSULTAN CY. 8. THE FACTS OF THE ASSESSEES CASE ARE MATERIALLY SAME TO THE CASES AS REFERRED TO THE ABOVE. BESIDES, THE ASSESS EE ALSO RELIED ON VARIOUS OTHER DECISIONS NAMELY; CIT V/S VINZAS SOLUTIONS (I) PVT LTD 98 CCH 0014 (M AD) RELIED ON S C DECISION IN TATA CONSULTANCY CIT V/S DYNAMIC VERTICAL SOFTWARE (I) PVT LTD 332 ITR 222 (DEL) PRI. CIT V/S M TECH(I) PVT LTD 381 ITR 31 (DEL) DIRECTOR OF INCOME TAX (INTERNATIONAL) V/S SUN MICR OSYSTEMS INDIA PVT LTD. 369 ITR 63 (KARN.) DIRECTOR OF INCOME TAX V/S NOKIA NETWORK OY. 358 IT R 259 (DEL.) CIT V/S HALLIBURTON EXPORT INC 386 ITR 123 (DEL) THE LD. A.R. FURTHER SUBMITTED THAT THERE IS A CONT RARY DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS. SAMSANG ELECTRONICS CO. LTD. 320 ITR 0209 BUT THE H ONBLE SUPREME COURT HAS HELD IN CIT VS. VEGETABLE PRODUCT S LTD. 88 ITR 192 THAT IF TWO REASONABLE CONSTRUCTION OF TAXI NG PROVISIONS ARE POSSIBLE THE CONSTRUCTION WHICH IS FAVOURABLE T O THE ASSESSEE MUST BE ADOPTED. FURTHER, ASSESSEE SUBMITTED THAT ASSESSEE HAS EVERY REASON TO BELIEVE THAT THE PAYMENT MADE F OR THE PURCHASE OF SOFTWARE IS NOT LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 195 OF THE ACT FOR THE REASON THAT THE REVENUE HAS ACCEPTED SIMILAR PAYMENTS IN THE EA RLIER YEARS WHICH WERE DONE WHERE THE ASSESSMENTS WERE FRAMED U NDER SECTION 143(3) OF THE ACT IN A.Y. 2007-08 AND 2008- 09 AND NO DISALLOWANCES WERE MADE UNDER SECTION 40(A)(I) FOR PURCHASE OF SOFTWARE FROM VISTA ENTERTAINMENT SOLUTION PVT. LTD ., NEW ZEALAND. THEREFORE, ASSESSEE HAS BONAFIDE BELIEF T HAT TDS PROVISION IS NOT APPLICABLE AS HAS BEEN HELD IN THE CASE OF CIT VS. KOTAK SECURITIES LTD. 340 ITR 333 (BOM. HC). FINALLY, THE ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 8 LD. A.R. PRAYED BEFORE THE BENCH THAT IN VIEW OF TH E ABOVE SUBMISSIONS AND CONTENTIONS AND RATIO LAID DOWN BY VARIOUS COURTS WHICH ARE APPARENTLY IN FAVOUR OF THE ASSESS EE THE APPEALS OF THE ASSESSEE MAY BE ALLOWED BY SETTING ASIDE THE ORDER OF LOWER AUTHORITIES. 9. THE LD. D.R., ON THE OTHER HAND, RELIED HEAVILY ON THE ORDER OF AUTHORITIES BELOW BY ARGUING THAT THE PAYMENT MA DE FOR PURCHASE OF SOFTWARE FROM VISTA ENTERTAINMENT SOLUTI ON PVT. LTD., NEW ZEALAND UNDER SOFTWARE DISTRIBUTORSHIP AG REEMENT FOR SELLING TO THE VARIOUS CUSTOMERS ALL OVER INDIA IS A ROYALTY OR FALLS WITHIN THE AMBIT OF ROYALTY AND THEREFORE LIABLE FO R TAX DEDUCTION AT SOURCE UNDER SECTION 195 OF THE ACT. SINCE THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS OF SECTION 195 OF THE ACT THE AO HAS RIGHTLY DISALLOWED THE PAYMENT MADE UNDER SE CTION 40(A)(I) OF THE ACT. THE LD. D.R. ALSO POINTED OUT THAT THERE IS NO FORCE IN THE CONTENTIONS OF THE ASSESSEE THAT THE V ISTA ENTERTAINMENT SOLUTION PVT. LTD., NEW ZEALAND HAS N O PE IN INDIA AND THEREFORE THE INCOME IS NOT LIABLE TO BE TAXED IN INDIA. THE LD. D.R. SUBMITTED THAT IT IS A CLEAR CUT CASE OF PAYMENT IN LIEU OF USAGE OF SOFTWARE IN THE NATURE OF ROYALTY WHICH IS TO BE USED BY THE CUSTOMERS OF THE ASSESSEE IN CINEMA THE ATERS FOR ONLINE BOOKING OF TICKETS AND THEREFORE THE ORDER O F LD. CIT(A) MAY BE AFFIRMED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE IM PUGNED ORDER UNDER CHALLENGE. THE UNDISPUTED FACTS ARE TH AT THE ASSESSEE HAS MADE PAYMENT OF RS.74,18,078/- TO VIST A ENTERTAINMENT SOLUTION PVT. LTD., NEW ZEALAND IN A. Y. 2010-11 ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 9 AND RS.77,70,635/- IN A.Y. 2012-13 FOR PURCHASE OF SOFTWARE WHICH IS TO BE USED BY THE CUSTOMERS OF THE ASSESSE E IN CINEMA THEATRES OR HALLS FOR ONLINE BOOKING OF TICKETS. T HIS IS ALSO FACT THAT SIMILAR PAYMENTS WERE MADE DURING THE ASSESSME NT YEAR 2007-08 AND 2008-09 AND WERE ACCEPTED BY THE AO IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT. THUS THERE IS A MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT ASSESSEE HAS BONAFIDE BELIEF THAT SUCH PAYMENTS ARE NOT SUBJECT TO DEDUCTION OF TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 19 5 OF THE ACT AS THE HONBLE BOMBAY HIGH COURT HAS HELD SO IN THE CA SE OF CIT VS. KOTAK SECURITIES LTD. (SUPRA). SECONDLY THE LD. CIT(A) WHILE PASSING THE APPELLATE ORDER HAS RELIED ON THE DECIS ION OF DIT VS. RELIANCE COMMUNICATIONS & ORS. (SUPRA) BUT THE SAID ORDER HAS BEEN RECALLED IN MA VIDE ORDER DATED 18.11.2016. W E ALSO FIND MERITS IN THE CONTENTIONS OF THE ASSESSEE THAT PURC HASE OF SOFTWARE IS AKIN TO PURCHASE OF GOODS BY THE ASSESS EE FROM A NON RESIDENT WHO HAS NO PE IN INDIA AND THEREFORE THE P ROVISIONS OF SECTION 195 ARE NOT ATTRACTED. THE CASE OF THE ASS ESSEE IS SQUARELY COVERED BY THE DECISION OF APEX COURT IN T HE CASE OF TATA CONSULTANCY SERVICES PVT. LTD. VS. STATE OF AN DHRA PRADESH (SUPRA) WHICH HAS BEEN FOLLOWED IN A NUMBER OF DECI SIONS NAMELY CIT V/S VINZAS SOLUTIONS (I) PVT. LTD. (SUPRA ) AND ACIT VS. SONATA INFORMATION TECH. LTD. (SUPRA). IN THE CASE OF CIT VS. VINZAS SOLUTIONS (I) PVT. LTD. (SUPRA) IT HAS BEEN H ELD THAT THERE IS A DIFFERENCE BETWEEN SALE OF COPYRIGHT, ARTICLE AND COPYRIGHT ITSELF AND THE PROVISIONS OF SECTION 9(1)(VI) AS A WHOLE WOULD BE ATTRACTED IN THE CASE OF LATTER AND NOT THE FORMER AS IT IS SALE OF PRODUCT. SO FAR AS THE DECISION OF HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. SAMSANG ELECTRONICS CO. LTD. (SUPRA) IS ITA NO.2098/M/2016 & ITA NO.3095/M/2018 M/S. BIGTREE ENTERTAINMENT PVT. LTD., 10 CONCERNED THOUGH AGAINST THE ASSESSEE, WE ARE OF TH E CONSIDERED VIEW THAT WHERE THERE ARE DECISIONS OF HIGH COURTS FAVOURING ASSESSEE AND AGAINST THE ASSESSEE THE CONSTRUCTION WHICH IS FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED AS LA ID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETA BLE PRODUCTS LTD. (SUPRA). WE, THEREFORE, AFTER TAKING INTO ACC OUNT THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE DECISION OF A PEX COURT AND HIGH COURTS AND ALSO VARIOUS COORDINATE BENCHES OF THE TRIBUNALS, HOLD THAT THE PAYMENT BY THE ASSESSEE TO A NON RESIDENT COMPANY WHO HAS NO PE IN INDIA IS A PAYME NT FOR THE GOODS ONLY AND NOT LIABLE FOR TDS UNDER SECTION 195 OF THE ACT AS THAT DOESNT FALL WITHIN THE AMBIT/ REALM OF ROY ALTY AND ACCORDINGLY APPEAL OF THE ASSESSEE IS ALLOWED BY SE TTING ASIDE THE ORDER OF LD. CIT(A). 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.03.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED:14.03.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.