DCIT (International Taxation), New Delhi V. M/s Xiocom (NW) Ltd., New Delhi

ITA 2560/DEL/2016

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8709 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA No.2560/Del/2016 Assessment Year: 2010-11 DCIT Circle – 3 (1) (1) International Taxation New Delhi Vs M/s. Xiocom (NW) Ltd. C/o M/s. Srivastava& Jain 1114, 11 th Floor, Indraprakash Building, 21 Barakhamba Road, New Delhi-110001 PAN No.AAACX1006C (APPELLANT) (RESPONDENT) Appellant by Sh. N. C. Swain, CIT DR Respondent by None Date of hearing: 17/02/2022 Date of Pronouncement: 17/02/2022 ORDER PER N. K. BILLAIYA, AM: This appeal filed by the Revenue is preferred against the order of the CIT(A)-43, New Delhi dated 12.02.2016 pertaining to A.Y. 2010-11. 2 2. The grievance of the revenue read as under :- 3. None attended on behalf of the assessee inspite of notice, we decided to proceed exparte. 4. The DR was heard at length. Case record carefully perused. 3 5. Ground No.2 as mentioned above is in itself sufficient to dismiss this appeal but for the sake of completeness we will consider the facts in brief. 6. The assessee company is involved in designing and providing fully tailored off the shelf wireless broadband solutions throughout the USA and a few other countries in Africa. During the year under consideration the assessee company sold “off the shelf” software through a non-exclusive license rights to the Zylog systems (India) Ltd. to utilize the technology in certain areas in India. 7. During the course of the scrutiny assessment proceedings the assessee was asked to show cause as to why receipt from granting of license should not be treated as Royalty. The assessee filed a detailed submission explaining the nature of the transaction. The detailed submissions of the assessee have been extracted by the AO at para-3 of his order and after extracting the detailed submissions the AO formed a belief that the income of Rs.192480000/- from license IMS software to Zylog Systems (India) Ltd. is taxable u/s. 9 (1) (vi) of the Act and under Article 12 of Indo-NZ DTAA. 8. Assessee strongly agitated the matter before the CIT(A) and placed strong reliance on the decision of the Hon’ble 4 Jurisdictional High Court of Delhi in the case of Infrasoft Limited in ITA No.1034/2009. 9. After considering the facts and the submissions and after perusing the binding decision of the Hon’ble Jurisdictional High Court of Delhi the CIT(A) held as under :- 5 10. Before us the DR placed strong reliance on the assessment order but could not bring any distinguishing decision in favour of the revenue. 11. We find that impugned quarrel has now been well settled by the judgment of the Hon’ble Supreme court in the case of Engineering Analysis Centre of Excellence Private Limited 432 ITR 471 wherein the Hon’ble Supreme Court has also considered the Judgment of Hon’ble Delhi High Court. The relevant finding of the Hon’ble Supreme Court read as under :- 6 12. Respectfully following the decision of the Hon’ble Supreme Court (supra) we decline to interfere with the findings of the CIT(A). 13. Ground No.1,2 and 3 are allowed and ground No.4 becomes infructuous. 14. In the result, the appeal filed by the Revenue is dismissed. 15. Decision announced in the open court in the presence of both representatives on 17.02.2022. Sd/- Sd/- (ASTHA CHANDRA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* Date:- 17 .02.2022 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for Pronouncement Date on which the fair order comes back to the Sr. PS/ PS Date on which the final order is uploaded on the website of ITAT 18.02.2022 Date on which the file goes to the Bench Clerk Date on which file goes to the Head Clerk. The date on which file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order