ACIT, CHENNAI V. M/s. Dassault Systems Simulia P Ltd., CHENNAI

ITA 323/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0949 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: V BALAJI
• Keywords: Non-deduction of tax
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 323/MDS/2012 (ASSESSMENT YEAR : 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(4), CHENNAI - 600 034 . (APPELLANT) V. M/S DASSAULT SYSTEMS SIMULIA PVT. LTD., 10 TH FLOOR, ASV N RAMANA TOWER, 37 & 38, VENKATANARAYANA ROAD, T. NAGAR, CHENNAI - 600 017. PAN : AAACF 4457 B (RESPONDENT) APPELLANT BY : SHRI T.N. BETGIRI, JCIT RESPONDENT BY : SHRI V. BALAJI, C A DATE OF HEARING : 22.01.2013 DATE OF PRONOUNCEMENT : 22.01.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, IT IS AGGRIE VED THAT THE CIT(APPEALS) DELETED A DISALLOWANCE MADE BY THE A.O . UNDER SECTION 40(A)(IA) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE AC T') FOR NON-DEDUCTION OF TAX AT SOURCE, ON PAYMENTS EFFECTED BY THE ASSES SEE TO ONE M/S ABAQUS INC. AS PER REVENUE, SUCH PAYMENTS WERE ROY ALTY COVERED I.T.A. NO. 323/MDS/12 2 UNDER SECTION 9(1)(VI) OF THE ACT AND ASSESSEE WAS OBLIGED TO DEDUCT TAX AT SOURCE UNDER SECTION 195 SINCE THE PAYMENTS WERE EFFECTED TO A NON-RESIDENT. 2. WHEN THE MATTER CAME UP BEFORE US, LEARNED A.R. SUBMITTED THAT SIMILAR DISALLOWANCE MADE IN ASSESSMENT YEAR 2 006-07 WAS DELETED BY CIT(APPEALS) ON APPEAL OF THE ASSESSEE A ND THE VIEW OF THE LD. CIT(APPEALS) WAS CONFIRMED BY THIS TRIBUNAL IN REVENUES APPEAL IN I.T.A. NOS. 1698 TO 1702/MDS/2010 DATED 1 6.9.2011. 3. LEARNED D.R. FAIRLY AGREED THAT THE ISSUE STOOD COVERED IN FAVOUR OF ASSESSEE. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE SUBMIS SIONS. THE TRIBUNAL HAD, FOR ASSESSMENT YEAR 2006-07, CONFIRME D THE VIEW TAKEN BY THE LD. CIT(APPEALS) THAT THE PAYMENTS EFFECTED BY THE ASSESSEE TO M/S ABAQUS INC., WERE NOT ROYALTY. FINDING OF T HE TRIBUNAL WAS THAT WHAT WAS ACQUIRED BY THE ASSESSEE WAS ONLY A RIGHT OF USE A COPYRIGHTED SOFTWARE AND NOT COPYRIGHT IN A SOFTWAR E. IN THE ASSESSMENT ORDER ITSELF, THE A.O. HAS MENTIONED THA T THE DISALLOWANCE WAS BEING MADE DESPITE TRIBUNALS RULI NG IN FAVOUR OF THE ASSESSEE FOR KEEPING ALIVE THE ISSUE. HOWEVER, LEARNED D.R. WAS I.T.A. NO. 323/MDS/12 3 UNABLE TO SHOW ANY ORDER OF ANY HIGHER AUTHORITIES WHICH WOULD MAKE THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 2006-07 INOP ERATIVE. WE, THEREFORE, FIND NO ERROR IN THE ORDER OF CIT(APPEAL S) APPLYING THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 2006-07 AND RULI NG IN FAVOUR OF ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 22 ND OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND JANUARY, 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IX, CHENNAI-34 (4) CIT-I, CHENNAI-34 (5) D.R. (6) GUARD FILE