M/s.JDA Software Inc., Bangalore V. Income-Tax Officer, Bangalore

ITA 2313/BANG/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7012 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 23-08-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 27-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: T SURYANARAYANA
• Keywords: Double taxation relief; TDS
• Section: 271(1)(c); 234B; 195

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER IT(IT)A NO.2313/BANG/2016 ASSESSMENT YEAR : 2013-14 BLUE YONDER INC. (FORMERLY KNOWN AS JDA SOFTWARE INC.) C/O BLUE YONDER INDIA PVT. LTD., TOWER A, MANTRI COMMERCIO, DEVARABEESANAHALLI, OUTER RING ROAD, VARTHUR HOBLI, BENGALURU-560 103. PAN AACCJ 3581 C VS. THE INCOME-TAX OFFICER (INTERNATIONAL TAXATION), WARD-1(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI T SURYA NARAYANA, ADVOCATE REVENUE BY : SHRI VILAS V SHINDE, CIT(DR) DATE OF HEARING : 23-08-2021 DATE OF PRONOUNCEMENT : -08-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER D ATED 20/10/2016 PASSED BY THE LD.AO U/S.143(3) R.W.S. 14 4C(13) OF THE INCOME-TAX ACT, 1961 [THE ACT] ON THE FOLLOWING GROUNDS :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE INCOME TAX OFFICER (INTERNATIONAL TAXATION), WARD-L (1) ('LD.AO') HAS ERRED IN COMPUTING THE TOTAL INCOME OF THE APPELLANT AT I NR 98,413,296 AS AGAINST NIL RETURNED INCOME. PAGE 2 OF 10 IT(IT)A NO.2313/BANG/2016 ERRONEOUS TREATMENT OF THE RECEIPTS FROM INDIAN CUS TOMERS TOWARDS SALE OF SOFTWARE AS ROYALTY' 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN HOLDING AND THE HON'BLE DISPUTE RESOLUTION PANEL ('DRP') HAS FURTHER ERRED IN CONFIRMING THAT THE PAYMENTS RECEI VED BY THE APPELLANT FROM THE INDIAN CUSTOMERS TOWARDS SALE OF SOFTWARE IS IN THE NATURE OF 'ROYALTY' TAXABLE UNDER SECTION 9(1)(VI) OF THE INC OME-TAX ACT, 1961 ('THE ACT') AND ARTICLE 12 OF THE DOUBLE TAXATION AVOIDAN CE AGREEMENT ('DTAA') BETWEEN INDIA AND USA. ERRONEOUS TREATMENT OF RECEIPTS FROM INDIAN CUSTOME RS TOWARDS ANNUAL MAINTENANCE SERVICES FOR SERVICES FOR SOFTWARE AND SOFTWARE IMPLEMENTATION AND CONSULTANCY SERVICES 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN HOLDING AND THE DRP HAS ERRED IN CONFIRMIN G THAT THE PAYMENTS RECEIVED BY THE APPELLANT FROM THE INDIAN CUSTOMERS TOWARDS ANNUAL MAINTENANCE SERVICES AND IMPLEMENTATION AND CONSULT ANCY SERVICES IN RESPECT OF THE SOFTWARE LICENSES IS LIABLE TO TAX I N INDIA AS 'FEES FOR TECHNICAL SERVICES' UNDER SECTION 9(1)(VII) OF THE ACT AND AS 'FEE FOR INCLUDED SERVICES' UNDER ARTICLE 12(4)(A) OF THE IN DIA - USA DTAA. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN HOLDING AND THE DRP HAS ERRED IN CONFIRMIN G THAT THE SAID FEES ARE ANCILLARY AND SUBSIDIARY TO THE SALE OF SOFTWAR E AND HENCE, FALLS UNDER THE PROVISIONS OF ARTICLE 12(4)(A) OF THE IND IA- USA DTAA. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN HOLDING AND THE DRP HAS ERRED IN CONFIRMIN G THAT THE SERVICES OF THE APPELLANT ENTAILS MAKING AVAILABLE OF TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL,+ KNOW-HOW OR PROCESS OR CONSISTS OF THE DEVELOPMENT AND TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIG N. SHORT GRANT OF TDS CREDIT 6 .ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN GRANTING CREDIT FOR TDS ONLY TO THE EXTENT OF INR 9,400,107 AS AGAINST ELIGIBLE TDS CREDIT OF INR 10,255,810. LEVY OF INTEREST UNDER SECTION 234B 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN LEVYING INTEREST 8 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTI ON 271(1)(C) OF THE ACT. RELIEF 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE APPELLANT PRAYS THAT THE LD. AO BE DIRECTED TO GRANT ALL SUCH RELIEF ARISING FROM THE PRECEDING GROUNDS AS ALSO ALL RELIEF CONSEQUENTIAL THERETO. THE APPELLANT SUBMITS THAT THE ABOVE GROUNDS ARE IN DEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER. PAGE 3 OF 10 IT(IT)A NO.2313/BANG/2016 THE APPELLANT CRAVES LEAVE TO ADD TO OR ALTER, BY D ELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF THE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. THE ASSESSEE IS A TAX RESIDENT OF USA AND IS ENG AGED IN THE BUSINESS OF SALE OF COMPUTER SOFTWARE TO ITS CUSTOM ERS ALL OVER THE GLOBE INCLUDING INDIA. ASSESSEE ALSO PROVIDES M AINTENANCE AND OTHER SERVICES IN CONNECTION WITH COMPUTER SOFT WARE. ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAS EN TERED SERVICES TO VARIOUS CUSTOMERS AND INCOME RECEIVED A MOUNTS TO RS.9,84,13,296/- TOWARDS SALE OF SOFTWARE LICENSES AND SOFTWARE IMPLEMENTATION SUPPORT FEES AND ANNUAL MAINTENANCE FEE FROM VARIOUS CUSTOMERS IN INDIA. IN THE DRAFT ASSESSMENT ORDER DATED 24/03/2016, LD.AO CONCLUDED THAT THE AMOUNT RECEIVE D BY ASSESSEE CONSTITUTED ROYALTY WITHIN THE MEANING OF ARTICLE 12 (3) OF THE DTAA AND AS PER THE PROVISIONS OF SECTION 9( 1)(VI) OF THE ACT. THE LD.AO BROUGHT TO TAX THE RECEIPTS FROM IND IAN CUSTOMERS ON ACCOUNT OF ANNUAL MAINTENANCE SERVICES, IMPLEMEN TATION AND CONSULTANCY AS FEE FOR TECHNICAL SERVICES UNDER SEC TION 9(1)(VII) OF THE ACT AND FEE FOR INCLUDED SERVICES UNDER ARTICLE 12(4)(A) OF INDIA U.S. DTAA. 2.1. AGGRIEVED BY THE ORDER OF THE LD.AO, ASSESSEE RAISED OBJECTIONS BEFORE THE DRP. THE DRP UPHELD THE OBSER VATIONS OF LD.AO. UPON RECEIPT OF THE DRP DIRECTIONS, THE LD.A O PASSED IMPUGNED ORDER BY MAKING AN ADDITION OF RS.98,41,33 0/- HANDS OF ASSESSEE. PAGE 4 OF 10 IT(IT)A NO.2313/BANG/2016 2.2. AGGRIEVED BY THE ORDER OF LD. AO, ASSESSEE IS IN APPEAL BEFORE US NOW. 3.THE LD.AR CONTENDED THAT THE ISSUES RAISED NOW ST ANDS SETTLED BY THE DECISION OF HONBLE SUPREME COURT IN CASE OF ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PVT LTD VS CIT REPORTED IN (2012) 432 ITR 471 , WHEREIN IT HAS BEEN HELD THAT SALE OF SOFTWARE WO ULD NOT CONSTITUTE ROYALTY WITHIN THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT AND ARTICLE 12(4)(A) OF THE DTAA BETWEEN INDIA AND U.S. 3.1. AS REGARDS THE AMOUNTS RECEIVED TOWARDS ANNUAL MAINTENANCE SERVICES IMPLEMENTATION AND CONSULTANCY SERVICES, IT HAS BEEN STATED THAT WHEN THE RECEIPTS ON ACCOUN T OF SALE OF SOFTWARE ITSELF IS NOT INCLUDED AS ROYALTY THESE BE ING MISCELLANEOUS INCOME CANNOT BE BROUGHT TO TAX AS FE ES FOR TECHNICAL SERVICES. 3.2. ON THE CONTRARY THE LD.CIT.DR COULD NOT CONTRO VERT THE SUBMISSIONS MADE BY LD.AR AND THE RATIO OF HONBLE SUPREME COURT , HOWEVER PLACED RELIANCE ON THE ORDERS PASSED BY AUTHORITIES BELOW. THE LD.CIT.DR ALSO SUBMITTED THA T IN THIS CASE THE ASSESSMENT YEAR IS 2017-18 AND THE ISSUE MAY BE REMITTED TO THE LD.AO TO EXAMINE THE RELEVANT AGREEMENTS SO AS TO DECIDE THE ISSUE IN THE LIGHT OF THE SUPREME COURT JUDGMENT IN ENGINEERING ANALYSIS CENTRE OF EXCELLENCE P.LTD. (SUPRA) . WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 4. THE LD.AR ALSO RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF THE CASE OF ENGINEERING ANALYSIS CENTRE OF PAGE 5 OF 10 IT(IT)A NO.2313/BANG/2016 EXCELLENCE PRIVATE LIMITED V. CIT, (SUPRA) . THE HON'BLE SUPREME COURT IN THIS CASE HAS EXAMINED THE QUESTION WHETHER THE PAYMENTS MADE TO NON-RESIDENT SOFTWARE SUPPLIERS IS ROYALTY AND HENCE TDS U/S. 195 OF THE ACT WAS REQUIRED TO B E DEDUCTED ON THOSE PAYMENTS OR NOT. THE HON'BLE SUPREME COURT EXAMINED THIS QUESTION CONSIDERING FOUR TYPES OF SITUATIONS, WHICH HAS BEEN NARRATED AS UNDER:- 4. THE APPEALS BEFORE US MAY BE GROUPED INTO FOUR CATEGORIES: THE FIRST CATEGORY DEALS WITH CASES IN WHICH COMPUT ER SOFTWARE IS PURCHASED DIRECTLY BY AN END-USER, RESIDENT IN INDI A, FROM A FOREIGN, NON-RESIDENT SUPPLIER OR MANUFACTURER. THE SECOND CATEGORY OF CASES DEALS WITH RESIDENT IN DIAN COMPANIES THAT ACT AS DISTRIBUTORS OR RESELLERS, BY PURCHASIN G COMPUTER SOFTWARE FROM FOREIGN, NON-RESIDENT SUPPLIERS OR MANUFACTURE RS AND THEN RESELLING THE SAME TO RESIDENT INDIAN END-USERS. THE THIRD CATEGORY CONCERNS CASES WHEREIN THE DISTR IBUTOR HAPPENS TO BE A FOREIGN, NON-RESIDENT VENDOR, WHO, AFTER PURCH ASING SOFTWARE FROM A FOREIGN, NON-RESIDENT SELLER, RESELLS THE SAME TO RESIDENT INDIAN DISTRIBUTORS OR ENDUSERS. THE FOURTH CATEGORY INCLUDES CASES WHEREIN COMPUTER SOFTWARE IS AFFIXED ONTO HARDWARE AND IS SOLD AS AN INTEGRATED UNIT/EQUIPMENT BY FOREIGN, NONRESIDENT SUPPLIERS TO RESIDENT INDIAN D ISTRIBUTORS OR END- USERS. THE HON'BLE SUPREME COURT ANALYSED SAMPLE AGREEMENTS IN RESPECT OF ALL THE FOUR CATEGORIES AND GAVE THE FOL LOWING FINDING:- 45. A READING OF THE AFORESAID DISTRIBUTION AGREEM ENT WOULD SHOW THAT WHAT IS GRANTED TO THE DISTRIBUTOR IS ONLY A N ON-EXCLUSIVE, NON- TRANSFERABLE LICENCE TO RESELL COMPUTER SOFTWARE, I T BEING EXPRESSLY STIPULATED THAT NO COPYRIGHT IN THE COMPUTER PROGRA MME IS TRANSFERRED EITHER TO THE DISTRIBUTOR OR TO THE ULTIMATE END-US ER. THIS IS FURTHER AMPLIFIED BY STATING THAT APART FROM A RIGHT TO USE THE COMPUTER PROGRAMME BY THE END-USER HIMSELF, THERE IS NO FURT HER RIGHT TO SUBLICENSE OR TRANSFER, NOR IS THERE ANY RIGHT TO R EVERSE-ENGINEER, MODIFY, REPRODUCE IN ANY MANNER OTHERWISE THAN PERM ITTED BY THE LICENCE TO THE END-USER. WHAT IS PAID BY WAY OF CON SIDERATION, PAGE 6 OF 10 IT(IT)A NO.2313/BANG/2016 THEREFORE, BY THE DISTRIBUTOR IN INDIA TO THE FOREI GN, NON-RESIDENT MANUFACTURER OR SUPPLIER, IS THE PRICE OF THE COMPU TER PROGRAMME AS GOODS, EITHER IN A MEDIUM WHICH STORES THE SOFTWARE OR IN A MEDIUM BY WHICH SOFTWARE IS EMBEDDED IN HARDWARE, WHICH MAY B E THEN FURTHER RESOLD BY THE DISTRIBUTOR TO THE END-USER IN INDIA, THE DISTRIBUTOR MAKING A PROFIT ON SUCH RESALE. IMPORTANTLY, THE DI STRIBUTOR DOES NOT GET THE RIGHT TO USE THE PRODUCT AT ALL. 46.WHEN IT COMES TO AN END-USER WHO IS DIRECTLY SOL D THE COMPUTER PROGRAMME, SUCH END-USER CAN ONLY USE IT BY INSTALL ING IT IN THE COMPUTER HARDWARE OWNED BY THE END-USER AND CANNOT IN ANY MANNER REPRODUCE THE SAME FOR SALE OR TRANSFER, CONTRARY T O THE TERMS IMPOSED BY THE EULA. 47. IN ALL THESE CASES, THE 'LICENCE' THAT IS GRANT ED VIDE THE EULA, IS NOT A LICENCE IN TERMS OF SECTION 30 OF THE COPYRIGHT A CT, WHICH TRANSFERS AN INTEREST IN ALL OR ANY OF THE RIGHTS CONTAINED IN S ECTIONS 14(A) AND 14(B) OF THE COPYRIGHT ACT, BUT IS A 'LICENCE' WHICH IMPO SES RESTRICTIONS OR CONDITIONS FOR THE USE OF COMPUTER SOFTWARE. THUS, IT CANNOT BE SAID THAT ANY OF THE EULAS THAT WE ARE CONCERNED WITH AR E REFERABLE TO SECTION 30 OF THE COPYRIGHT ACT, INASMUCH AS SECTIO N 30 OF THE COPYRIGHT ACT SPEAKS OF GRANTING AN INTEREST IN ANY OF THE RIGHTS MENTIONED IN SECTIONS 14(A) AND 14(B) OF THE COPYRI GHT ACT. THE EULAS IN ALL THE APPEALS BEFORE US DO NOT GRANT ANY SUCH RIGHT OR INTEREST, LEAST OF ALL, A RIGHT OR INTEREST TO REPRODUCE THE COMPUTER SOFTWARE. IN POINT OF FACT, SUCH REPRODUCTION IS EXPRESSLY INTER DICTED, AND IT IS ALSO EXPRESSLY STATED THAT NO VESTIGE OF COPYRIGHT IS AT ALL TRANSFERRED, EITHER TO THE DISTRIBUTOR OR TO THE END-USER. A SIMPLE ILL USTRATION TO EXPLAIN THE AFORESAID POSITION WILL SUFFICE. IF AN ENGLISH PUBL ISHER SELLS 2000 COPIES OF A PARTICULAR BOOK TO AN INDIAN DISTRIBUTOR, WHO THEN RESELLS THE SAME AT A PROFIT, NO COPYRIGHT IN THE AFORESAID BOOK IS TRANSFERRED TO THE INDIAN DISTRIBUTOR, EITHER BY WAY OF LICENCE OR OTH ERWISE, INASMUCH AS THE INDIAN DISTRIBUTOR ONLY MAKES A PROFIT ON THE S ALE OF EACH BOOK. IMPORTANTLY, THERE IS NO RIGHT IN THE INDIAN DISTRI BUTOR TO REPRODUCE THE AFORESAID BOOK AND THEN SELL COPIES OF THE SAME. ON THE OTHER HAND, IF AN ENGLISH PUBLISHER WERE TO SELL THE SAME BOOK TO AN INDIAN PUBLISHER, THIS TIME WITH THE RIGHT TO REPRODUCE AND MAKE COPI ES OF THE AFORESAID BOOK WITH THE PERMISSION OF THE AUTHOR, IT CAN BE S AID THAT COPYRIGHT IN THE BOOK HAS BEEN TRANSFERRED BY WAY OF LICENCE OR OTHERWISE, AND WHAT THE INDIAN PUBLISHER WILL PAY FOR, IS THE RIGH T TO REPRODUCE THE BOOK, WHICH CAN THEN BE CHARACTERISED AS ROYALTY FO R THE EXCLUSIVE RIGHT TO REPRODUCE THE BOOK IN THE TERRITORY MENTIONED BY THE LICENCE. 4.1 AFTER ANALYSING THE PROVISIONS OF INCOME TAX AC T, PROVISIONS OF DTAA, THE RELEVANT AGREEMENTS ENTERED BY THE ASSESS EES WITH PAGE 7 OF 10 IT(IT)A NO.2313/BANG/2016 NON-RESIDENT SOFTWARE SUPPLIERS, PROVISIONS OF COPY RIGHT ACTS, THE CIRCULARS ISSUED BY CBDT, VARIOUS CASE LAWS REL IED UPON BY THE PARTIES, THE HON'BLE SUPREME COURT CONCLUDED AS UNDER:- CONCLUSION 168. GIVEN THE DEFINITION OF ROYALTIES CONTAINED IN ARTICLE 12 OF THE DTAAS MENTIONED IN PARAGRAPH 41 OF THIS JUDGMENT, I T IS CLEAR THAT THERE IS NO OBLIGATION ON THE PERSONS MENTIONED IN SECTION 195 OF THE INCOME-TAX ACT TO DEDUCT TAX AT SOURCE, AS THE DIST RIBUTION AGREEMENTS/EULAS IN THE FACTS OF THESE CASES DO NOT CREATE ANY INTEREST OR RIGHT IN SUCH DISTRIBUTORS/END-USERS, W HICH WOULD AMOUNT TO THE USE OF OR RIGHT TO USE ANY COPYRIGHT. THE PROVI SIONS CONTAINED IN THE INCOME-TAX ACT (SECTION 9(1)(VI), ALONG WITH EXPLAN ATIONS 2 AND 4 THEREOF), WHICH DEAL WITH ROYALTY, NOT BEING MORE B ENEFICIAL TO THE ASSESSEES, HAVE NO APPLICATION IN THE FACTS OF THES E CASES. 169. OUR ANSWER TO THE QUESTION POSED BEFORE US, IS THAT THE AMOUNTS PAID BY RESIDENT INDIAN END-USERS/DISTRIBUTORS TO N ON-RESIDENT COMPUTER SOFTWARE MANUFACTURERS/SUPPLIERS, AS CONSI DERATION FOR THE RESALE/USE OF THE COMPUTER SOFTWARE THROUGH EULAS/D ISTRIBUTION AGREEMENTS, IS NOT THE PAYMENT OF ROYALTY FOR THE U SE OF COPYRIGHT IN THE COMPUTER SOFTWARE, AND THAT THE SAME DOES NOT G IVE RISE TO ANY INCOME TAXABLE IN INDIA, AS A RESULT OF WHICH THE P ERSONS REFERRED TO IN SECTION 195 OF THE INCOME-TAX ACT WERE NOT LIABLE T O DEDUCT ANY TDS UNDER SECTION 195 OF THE INCOME-TAX ACT. THE ANSWER TO THIS QUESTION WILL APPLY TO ALL FOUR CATEGORIES OF CASES ENUMERAT ED BY US IN PARAGRAPH 4 OF THIS JUDGMENT. 4.2 IT IS PERTINENT TO NOTE THAT THE HONBLE SUPREME COURT HAS REVERSED THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF SAMSUNG ELECTRONICS CO LTD (SUPRA) . 4.3 A PERUSAL OF THE DECISION RENDERED BY HONBLE SUPREME COURT WOULD BRING OUT FOLLOWING PRINCIPLES: - RELEVANT DTAA PROVISIONS ARE REQUIRED TO BE CONSIDE RED FOR DETERMINING THE QUESTION WHETHER THE PAYMENTS MADE BY THE ASSESSEE TO NON-RESIDENT COMPANIES FOR PURCHASE OF SOFTWARE ARE IN THE NATURE OF ROYALTY OR NOT. WHERE EVER INDIA HAS ENTERED DOUBLE TAXATION AVOIDA NCE AGREEMENT WITH THE COUNTRY OF NON-RESIDENT SUPPLIER, THERE IS NO NECESSITY TO REFER TO THE PROVISIONS OF SEC. 9(1)(VI) OF THE ACT FOR T HE PAYMENTS MADE TO THE PAGE 8 OF 10 IT(IT)A NO.2313/BANG/2016 NON-RESIDENT PERSONS, UNLESS THE DOMESTIC PROVISION S ARE BENEFICIAL TO THOSE PERSONS. THE AGREEMENTS ENTERED BY THE ASSESSEE WITH THE NON -RESIDENT SOFTWARE SUPPLIERS ARE REQUIRED TO BE EXAMINED TO F IND OUT WHETHER THE 'LICENCE' THAT IS GRANTED VIDE THE EULA, IS NOT A L ICENCE IN TERMS OF SECTION 30 OF THE COPYRIGHT ACT, WHICH TRANSFERS AN INTEREST IN ALL OR ANY OF THE RIGHTS CONTAINED IN SECTIONS 14(A) AND 1 4(B) OF THE COPYRIGHT ACT, BUT IS A 'LICENCE' WHICH IMPOSES RESTRICTIONS OR CONDITIONS FOR THE USE OF COMPUTER SOFTWARE. 4.4 HOWEVER, WE OBSERVE THAT IN THE INSTANT CASE TH E LOWER AUTHORITIES HAS NOT EXAMINED THE RELEVANT AGREEMENT S ENTERED INTO BY THE ASSESSEE WITH THE CONCERNED PARTIES. E VEN BEFORE US, NO SUCH DOCUMENT HAS BEEN PRODUCED BY THE ASSESSEE. IN VIEW OF THIS, IT IS APPROPRIATE TO REMIT THE ISSUE IN DI SPUTE TO THE FILE OF THE LD.AO FOR DECIDING THE COMPARABILITY OF THESE T RANSACTIONS IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE L IMITED (SUPRA) . ACCORDINGLY, THE ISSUE IN DISPUTE IS REMITTED TO TH E ASSESSING OFFICER FOR FRESH DECISION WITH THE ABOVE DIRECTION S. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2021 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMB ER BANGALORE, DATED, THE 26 TH AUG, 2021. /VMS/ PAGE 9 OF 10 IT(IT)A NO.2313/BANG/2016 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 10 OF 10 IT(IT)A NO.2313/BANG/2016 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -8- 2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -8- 2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -8- 2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -8- 2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -8- 2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -8- 2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -8- 2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS