Allianz SE (Formerly known as Allianz AG), Pune V. Dy. Director of Income Tax, Pune

ITA 337/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88981 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Capital asset; Double taxation relief; Deemed to accrue or arise in india; Permanent establishment; Advance ruling; Question of law
• Section: 260A; 6; 10; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.87 & 337/PN/2013 ASSESSMENT YEARS: 2008-09 & 2009-10 ALLIANZ SE (FORMERLY KNOWN AS ALLIANZ AG) C/O SRBC & ASSOCIATES, CHARTERED ACCOUNTANTS C-401, 4 TH FLOOR, PANCHSHIL TECHPARK, YERAWADA, PUNE 411006 . APPELLANT PAN: AAAAA2110L VS. THE DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION-I), PUNE . RESPONDENT APPELLANT BY : RAJAN VORA RESPONDENT BY : A.K. MODI DATE OF HEARING : 12-02-2015 DATE OF PRONOUNCEMENT : 20-02-2015 ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE ASSESSEE ARE AGAINST THE RESPECTIVE ORDERS OF DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXAT ION-I), PUNE DATED 25.10.2012 AND 29.11.2012 RELATING TO ASSESSMENT YE ARS 2008- 09 AND 2009-10, RESPECTIVELY PASSED UNDER SECTION 143(3 ) R.W.S. 144C(13) OF THE INCOME-TAX ACT, 1961. 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. IN BOTH THE CAPTIONED APPEALS, THE ISSUE RAISED BY T HE ASSESSEE AGAINST THE ASSESSABILITY OF CONSIDERATION RECEIVED FOR PROV ISION OF USER ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 2 RIGHTS OF SOFTWARE OPUS WAS WHETHER ROYALTY UNDER ART ICLE 12 OF THE TAX TREATY AND THEREFORE LIABLE TO TAX IN INDIA AT 10%. 4. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF AUTHORITIES BELOW IN HOLDING THAT THE SAID CONSIDERATION RECEIVED FOR PROVISION O F USER RIGHTS OF SOFTWARE OPUS TO BE ROYALTY AS DEFINED IN EXPLANATION 2 TO SECTION 9(1)(VI) OF THE ACT AND CONSEQUENTLY, ENHANCING THE INCOME OF THE ASSESSEE BY THE SAID AMOUNT RELATING TO PROVISION OF USER RIGHTS OF SOFTWARE OPUS. 5. BOTH THE AUTHORIZED REPRESENTATIVES AGREED THAT TH E SAID CONSIDERATION RECEIVED FOR PROVISION OF USER RIGHTS OF SOFTWA RE OPUS WAS HELD TO BE NOT TAXABLE IN THE HANDS OF THE ASSESSEE BY THE PUNE BENCH OF THE TRIBUNAL IN ITA NOS.157 & 158/PN/2011, RELATIN G TO ASSESSMENT YEARS 2004-05 & 2007-08 RESPECTIVELY, VIDE ORDER DATED 25.06.2012, AS UNDER:- 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDER OF THE AO AND THE PAPER BOOK FILE D ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO. 1569/P N/2008 ORDER DATED 14- 03-2012 FOR ASSESSMENT YEAR 2005-06 HAS HELD AS UND ER : 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE PERTINENT POINT TO BE ADDRESSED IN THIS APPEAL RELATES TO THE NATURE OF THE PAYMENTS RECEIVED BY THE ASSESSEE AS LICENSE CHARGE S. AS PER THE ASSESSEE, THE PAYMENTS HAVE BEEN RECEIVED AGAINST G RANTING OF A USER RIGHT IN THE OPUS SOFTWARE, WHICH IS A COPYRIGHTED PRODUCT AND NOT FOR THE USE OF COPYRIGHT ITSELF. THEREFORE, THE CASE OF THE ASSESSEE IS THAT SUCH LICENSE CHARGES ARE LIABLE TO BE TREATED AS PR OFITS FALLING IN ARTICLE 7 OF THE INDIA-GERMANY DTAA AND AS SUCH LICENSE CHARG ES ARE NOT ATTRIBUTABLE TO A PERMANENT ESTABLISHMENT (PE) IN I NDIA, SAME ARE NOT TAXABLE IN INDIA. IN SO FAR AS THE PLEA OF THE ASSE SSEE THAT IT HAS GRANTED ONLY USER RIGHT TO BA LIFE AND BA GENERAL I N TERMS OF THE LICENSE AGREEMENT, THE SAME IS NOT DISPUTED BY THE ASSESSING OFFICER. THE FOLLOWING DISCUSSION BY THE ASSESSING OFFICER W OULD SHOW THAT THERE IS NO DISPUTE TO THE ASSESSEES ASSERTION THA T IT IS ONLY RIGHT TO USE OF A COPYRIGHTED ARTICLE WHICH HAS BEEN GRANTED AND NOT FOR THE USE OF A COPYRIGHT:- THUS THE RIGHTS WERE RECEIVED BY ALLIANZ AG TO USE THE SOFTWARE. THESE RIGHTS WERE TRANSFERRED BY ALLIANZ TO BA LIFE AND BA GENERAL TO USE THE SOFTWARE IN INDIAN TERRIT ORIES. THUS, THE LICENSEE IN FIRST CASE (BETWEEN CERTIS AND ALLI ANZ) BECOMES SUB-LICENSOR (BETWEEN ALLIANZ AND BA LIFE/BA GENERA L.) AS SUBMITTED BY THE ASSESSEE THE COPYRIGHT OF OPUS VES TS WITH THE CGI GROUP. NOW CGI GROUP HAS ASSIGNED THE RIGHT TO USE THE SOFTWARE TO ALLIANZ AG IN THE AUTHORIZED TERRITORIE S (BASICALLY ALL ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 3 WORLD EXCEPT CANADA) FOR WHICH ALLIANZ AG WILL PAY SOME AMOUNT TO CGI GROUP. FURTHER, ALLIANZ AG ASSIGNS TH E RIGHT TO USE THE SOFTWARE TO BA LIFE AND BA GENERAL BEING IT S AFFILIATES IN INDIA. AS PER THE COPYRIGHT LAW, WHENEVER THE ASSIG NEE OF A COPYRIGHT BECOMES ENTITLED TO ANY RIGHTS COMPRISED IN THE COPYRIGHT, HE SHALL BE TREATED AS THE OWNER OF COPY RIGHT IN RESPECT OF THOSE RIGHTS. THE ASSIGNOR SHALL ALSO BE TREATED AS THE OWNER OF COPYRIGHT IN RESPECT OF UNASSIGNED RIGHTS. IF WE APPLY THIS PRINCIPLE WE CAN SAY THAT, IN RESPECT OF THE A UTHORISED TERRITORY, THE RIGHT TO USE THE SOFTWARE OPUS LIES ONLY WITH ALLIANZ DESPITE THE FACT THAT THE COPYRIGHT OF OPUS LIES WITH CGI GROUP. IN RESPECT OF EXERCISING THE RIGHT TO USE TH E SOFTWARE OPUS, ALLIANZ WILL HAVE NO LIMITATION EXCEPT AS THO SE BINDING ON IT BY THE TERMS OF THE AGREEMENT. BUT WILL DEFINITE LY ENJOY THE RIGHT TO USE THE SOFTWARE AS ITS OWNER. THERE WONT BE ANY OTHER RIGHTS ASSOCIATED WITH OPUS AT THE DISPOSAL OF ALLI ANZ. E.G. IT CANNOT BRAND THIS PRODUCT AS ITS OWN, IT CANNOT TER M THIS PRODUCE AS ITS OWN, IT CANNOT MARKET THIS PRODUCE E TC. SIMILAR TO THE RIGHTS OF ALLIANZ IN THE AUTHORISED TERRITORY, THE BA LIFE AND BA GENERAL WILL ENJOY THE RIGHTS IN INDIA. THE RIGH TS IN THIS REGARD ONLY MEAN THE RIGHT TO USE THE SOFTWARE IN I NDIA. 5.5.THE THING TO BE NOTED HERE IS THAT THE COPYRIGHT OVER THE SOF TWARE REMAINED WITH THE CGI GROUP. PERTINENTLY, THERE IS NO DISAGREEMENT THAT THE COPY RIGHT CONTINUE TO REMAIN WITH THE CGI AS OBSERVED BY THE ASSESSING OF FICER. THE POINT TO BE ADDRESSED IS AS TO WHETHER THE PAYMENTS IN QUEST ION HAVE BEEN RECEIVED BY THE ASSESSEE FOR GRANT OF USE OF A COPY RIGHT OR FOR GRANT OF USE OF A COPYRIGHTED ARTICLE. OSTENSIBLY, THE PAYME NTS HAVE BEEN RECEIVED BY THE ASSESSEE FOR GRANT OF USE OF A COPY RIGHTED ARTICLE AND NOT FOR USE OF THE COPYRIGHT ITSELF. THUS, THE POIN T TO BE ADDRESSED IS WHETHER SUCH PAYMENTS ARE IN THE NATURE OF ROYALTY. SIMILAR SITUATION WAS CONSIDERED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MOTOROLA INC. (SUPRA). IN THAT CASE,, THE REVENUE H AD CONTENDED THAT THE RECEIPTS IN RESPECT OF LICENSE TO USE SOFTWARE, WHI CH WAS A PART OF THE HARDWARE, COULD BE TAXED ON THE BASIS THAT THE SAME CONSTITUTED ROYALTY WITHIN THE MEANING OF SECTION 9(1)(VI) OF THE ACT AND THE RELEVANT CLAUSES OF THE DOUBLE TAXATION AVOIDANCE A GREEMENT (DTAA) WITH THE COUNTRY OF ASSESSEES RESIDENCE. AS PER TH E SPECIAL BENCH, IF THE PAYMENT WAS FOR COPYRIGHT, THE SAME WAS LIABLE TO BE CLASSIFIED AS ROYALTY UNDER THE ACT AS WELL AS UNDER THE DTAA S O AS TO BE TAXABLE IN THE HANDS OF THE ASSESSEE. ON THE CONTRARY, IF THE PAYMENT IS FOUND TO BE FOR A COPYRIGHTED ARTICLE, THEN IT TAKES THE CHA RACTER OF PURCHASE PRICE OF THE ARTICLE AND WOULD NOT CONSTITUTE ROYALTY UND ER THE ACT OR UNDER THE RELEVANT CLAUSES OF THE DTAA. THE SPECIAL BENCH AFTER CONSIDERING THE MEANING OF THE EXPRESSION ROYALTY UNDER THE A CT AND THAT OF A COPYRIGHT UNDER THE COPYRIGHT ACT, 1957 HELD THAT WHAT WAS SOLD BY THE NON-RESIDENT WAS THE COPYRIGHTED ARTICLE AND TH E PAYMENT WAS NOT FOR A COPYRIGHT. THE AFORESAID PROPOSITION HAS SINC E BEEN EXAMINED AND AFFIRMED BY THE HONBLE DELHI HIGH COURT IN ITS ORD ER DATED 23.12.2011 (SUPRA), THE RELEVANT PORTION READS AS UNDER: WHETHER THE INCOME FROM THE SUPPLY CONTRACT CAN BE TREATED AS 'ROYALTY' UNDER SECTION 9(1)(VI) OF T HE ACT: 50. SECTION 9(1)(I) OF THE ACT WHICH DEALS WITH THE TAXABILITY OF ROYALTY INCOME READS AS UNDER: SECTION 9 INCOME DEE MED TO ACCRUE OR ARISE IN INDIA. (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA :- ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 4 (I) ALL INCOME ACCRUING OR ARISING, WHETHER DIRECTL Y OR INDIRECTLY, THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA, OR THROUGH OR FROM ANY PROPERTY IN INDIA, OR THROUGH OR FROM ANY ASSET OR SOURCE OF INCOME IN IN DIA, OR THROUGH THE TRANSFER OF A CAPITAL ASSET SITUATEI N INDIA' 51. THE SUBMISSION OF MR. PRASARAN, LEAMED ASG WAS THAT SOFTWARE PART OF THE EQUIPMENT SUPPLY WOULD ATTRACT ROYALTY AS COPY RIGHT OF THE SAID SOFTWARE PROGRAMME STILL VES TS WITH THE ASSESSEE. THEREFORE, PAYMENTS MADE OR THE LICENCE T O USE THE SOFTWARE PROGRAMME GIVE RISE TO ROYALTY FOR THE PUR POSES OF BOTH THE IT ACT AS WELL AS DTAA ENTERED INTO BETWEEN SWE DEN AND INDIA. REFERRING TO EXPLANATION II (V) TO SECTION 1 (VI) OF THE ACT AS WELL AS ARTICLE 13, PARA 3 OF DTAA, IT WAS ARGUED T HAT FOR THE PURPOSES OF INCOME-TAX LAW, IS ESSENTIALLY A PAYMEN T RECEIVED AS CONSIDERATION FOR THE USE OR RIGHT TO USE A PART ICULAR INTEGRAL PROPERTY RIGHT, WHETHER PARTIALLY OR ENTIRELY. 52. WE FIND THAT THE TRIBUNAL HAS HELD THAT THERE W AS NO PAYMENT TOWARDS ANY ROYALTY AND THIS CONCLUSION IS BASED ON THE FOLLOWING REASONING: (I). PAYMENT MADE BY THE CELLULAR OPERATOR CANNOT B E CHARACTERIZED AS ROYALTY EITHER UNDER THE INCOME TA X ACT OR UNDER THE DTAA. (II). THE OPERATOR HAS NOT BEEN GIVEN ANY OF THE SE VEN RIGHTS UNDER S.14 (A) (I) TO (VII) OF THE COPYRIGHT ACT, 1957 AND, THEREFORE WHAT IS TRANSFERRED IS NOT A COPYRIG HT BUT ACTUALLY A COPYRIGHTED ARTICLE. (III). THE CELLULAR OPERATOR CANNOT COMMERCIALLY EX PLOIT THE SOFTWARE AND THEREFORE A COPYRIGHT IS NOT TRANSFERR ED. (IV). FURTHER, THE PARTIES TO THE AGREEMENT HAVE NO T AGREED UPON A SEPARATE PRICE FOR THE SOFTWARE AND THEREFORE IT IS NOT OPEN FOR THE INCOME TAX AUTHORI TIES TO SPLIT THE SAME AND CONSIDER PART OF THE PAYMENT FOR SOFTWARE TO BE ROYALTY (V). THE BILL OF ENTRY FOR IMPORTING OF GOODS SHOWS THAT THE PRICE HAS BEEN SEPARATELY MENTIONED FOR SOFTWARE AN D THAT THIS WAS ONLY FOR THE PURPOSES OF CUSTOMS. THE RE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE WAS A PARTY T O THE FIXATION OF VALUE FOR THE CUSTOMS DUTY PURPOSES . (VI). THE SOFTWARE PROVIDED UNDER THE CONTRACT IS G OODS AND THEREFORE NO ROYALTY CAN BE SAID TO BE PAID FOR IT. 53. MR. PRASARAN, COUNTERED THE AFORESAID REASONING ARGUING THAT CLAUSE 20 OF THE SUPPLY CONTRACT USES THE TERM 'LICENCE' AND THE SAME TERM IS USED IN THE CONTEXT OF SOFTWARE TH ROUGHOUT THE THREE AGREEMENTS INDICATING THAT IT IS NOT AN OUTRI GHT SALE OF GOODS, OR A FULL TRANSFER RIGHTS FROM THE ASSESSEE TO THE INDIAN COMPANY. HE ALSO SUBMITTED THAT THE SOFTWARE IS A C OMPUTER PROGRAMME, WHICH IS TREATED DIFFERENTLY FROM A BOOK , NOT ONLY IN THE COPYRIGHT ACT,1957 BUT ALSO THE INCOME TAX ACT' ITSELF. HIS SUBMISSION WAS THAT SECTION 52(1) (AA) OF THE COPYR IGHT ACT ONLY DEEMS THAT CERTAIN ACTS WILL NOT TO AMOUNT TO INFRI NGEMENT IN THE LIGHT OF VARIOUS CONCERNS, WHERE OTHERWISE SUCH ACT S WOULD AMOUNT TO INFRINGEMENT UNDER SECTION 51 OF THE COPY RIGHT ACT. THE PROVISION CANNOT BY ITSELF BE USED TO HOLD THAT NO RIGHT EXISTS IN THE FIRST PLACE SINCE THE SCOPE OF THE RIGHT HAS TO BE UNDERSTOOD ONLY FROM THE PROVISIONS OF SECTION 14 O F THE COPYRIGHT ACT, 1957. HE ALSO ARGUED THAT THE ITAT H AS MISINTERPRETED THE PROVISIONS OF THE DTAA, SPECIFIC ALLY ARTICLE 13, PARA 3 OF THE DTAA (ARTICLE 12, PARA 3 OF THE M ODEL CONVENTION) WHICH DEFINES ROYALTIES TO MEAN 'PAYMEN TS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR SCIENTI FIC WORK'. THE ITAT, SUBMITTED, HAS NOT APPRECIATED THAT THE ROYAL TY IS FOR THE USE OR RIGHT TO USE ANY COPYRIGHT. ACCORDING TO HIM , SINCE TITLE OF ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 5 THE SOFTWARE CONTINUED TO VEST WITH THE ASSESSEE AS PROVIDED IN CLAUSE 20.2 OF THE SUPPLY AGREEMENT AND THE ASSESSE E WAS FREE TO GRANT NON-EXCLUSIVE LICENSES TO OTHER PARTIES, I T FOLLOW THAT THERE WAS NO FULL TIME TRANSFER OF COPYRIGHT BUT I WAS ONLY A CASE OF RIGHT TO USE THE SOFTWARE, AND THUS PAYMENT FOR USE OF SOFTWARE IS TO BE TREATED AS ROYALTY. HE FURTHER AR GUED THAT REFERENCE TO OECD COMMENTARY WAS NOT APPOSITE AS IT COULD NOT BE USED TO INTERPRET THE SCOPE OF THE RELEVANT PROV ISIONS OF DTAA. 54. IT IS DIFFICULT TO ACCEPT THE AFORESAID SUBMISS IONS IN THE FACT~PRESENT CASCO WE HAVE ALREADY HELD ABOVE THAT THE ASSESSEE DID L1( ANY BUSINESS CONNECTION IN INDIA. WE HAVE ALSO HELD THAT THE SUR EQUIPMENT IN QUESTION WAS IN THE NATURE OF SUPPLY OF GOODS. THIS ISSUE IS TO BE EXAMINED KEEPI NG IN VIEW THESE FINDINGS. MOL ANOTHER FINDING OF FACT IS RECO RDED BY THE TRIBUNAL THAT THE COOPERATOR DID NOT ACQUIRE ANY OF THE COPYRIGHTS REFERRED TO IN SECT] (B) OF THE COPYRIGH T ACT,1957. 55. ONCE WE PROCEED ON THE BASIS OF AFORESAID FACTU AL FINDING~DIFFICULT TO HOLD THAT PAYMENT MADE TO THE ASSESSEE WAS IN THE NATURE OF ROYALTY EITHER UNDER THE INCOME-TA X ACT OR UNDER THE DTAA. WE HAVE TO KEEP IN MIND WHAT WAS SOLD BY THE ASSESSEE TO THE INDIAN CUSTOMERS WAS A GSM WHICH CO NSISTED BOTH OF THE HARDWARE AS WE] SOFTWARE, THEREFORE, TH E TRIBUNAL IS RIGHT IN HOLDING THAT IT PERMISSIBLE FOR THE REVENU E TO ASSESS THE SAME UNDER TWO ARTICLES. THE SOFTWARE THAT WAS LOAD ED ON THE HARDWARE DID NOT L INDEPENDENT EXISTENCE. THE SOFTW ARE SUPPLY IS AN INTEGRAL PAL GSM MOBILE TELEPHONE SYSTEM AND IS USED BY THE CELLULAR OPERATOR FOR PROVIDING THE CELLULAR SE RVICES TO ITS CUSTOMERS. THERE COULD NO INDEPENDENT USE OF SUCH S OFTWARE. THE SOFTWARE IS EMBODIED IN THE SYSTEM AND THE REVE NUE ACCEPTS THAT IT COULD NOT BE USED INDEPENDENTLY. TH IS SOFTWARE MERELY FACILITATES THE FUNCTIONING OF THE EQUIPMENT AN INTEGRAL PART THEREOF. ON THESE FACTS, IT WOULD BE USEFUL TO REFER JUDGMENT OF THE SUPREME COURT IN TATA CONSULTANCY SERVICES S TATE OF ANDHRA PRADESH, 271 ITR 401, WHEREIN THE APEX COURT HELD THAT SOFTWARE WHICH IS INCORPORATED ON A MEDIA WOULD BE GOODS AND THEREFORE, L LIABLE TO SALES TAX. FOLLOWING DISCUSS ION IN THIS BEHALF IS REQUIRED TO BE NOTED:- ` 'IN OUR VIEW, TH E TERM 'GOODS' AS USED IN ARTICLE 366(12) OF THE CONSTITUTION OF I NDIA AND AS DEFINED UNDER THE SAID ACT ARE VERY WIDE AND INCLUD E ALL TYPES OF MOVABLE PROPERTIES, WHETHER THOSE PROPERTIES BE TANGIBLE OR INTANGIBLE. WE ARE IN COMPLETE AGREEMENT WITH THE O BSERVATIONS MADE BY THIS COURT IN ASSOCIATED CEMENT COMPANIES L TD. (SUPRA). A SOFTWARE PROGRAMME MAY CONSIST OF VARIOU S COMMANDS WHICH ENABLE THE COMPUTER TO PERFORM A DES IGNATED TASK. THE COPYRIGHT IN THAT PROGRAMME MAY REMAIN WI TH THE ORIGINATOR OF THE PROGRAMME. BUT THE MOMENT COPIES ARE MADE AND MARKETED, IT BECOMES GOODS, WHICH ARE SUSCEPTIB LE TO SALES TAX. EVEN INTELLECTUAL PROPERTY, ONCE IT IS PUT ON TO A MEDIA, WHETHER IT BE IN THE FORM OF BOOKS OR CANVAS (IN CA SE OF PAINTING) OR COMPUTER DISCS OR CASSETTES, AND MARKETED WOULD BECOME 'GOODS'. WE SEE NO DIFFERENCE BETWEEN A SALE OF A S OFTWARE PROGRAMME ON A CD/FLOPPY DISC FROM A SALE OF MUSIC ON A CASSETTE/CD OR A SALE OF A FILM ON A VIDEO CASSETTE /CD. IN ALL SUCH CASES, THE INTELLECTUAL PROPERTY HAS BEEN INCO RPORATED ON A MEDIA FOR PURPOSES OF TRANSFER. SALE IS NOT JUST OF THE MEDIA WHICH BY ITSELF HAS VERY LITTLE VALUE. THE SOFTWARE AND THE MEDIA CANNOT BE SPLIT UP. WHAT THE BUYER PURCHASES AND PA YS FOR IS NOT THE DISC OR THE CD. AS IN THE CASE OF PAINTINGS OR BOOKS OR MUSIC OR FILMS THE BUYER IS PURCHASING THE INTELLEC TUAL PROPERTY AND NOT THE MEDIA I.E. THE PAPER OR CASSETTE OR DIS C OR CD. THUS A TRANSACTION SALE OF COMPUTER SOFTWARE IS CLEARLY A SALE OF 'GOODS' WITHIN THE MEANING OF THE TERM AS DEFINED I N THE SAID ACT. THE TERM 'ALL MATERIALS, MIICLES AND COMMODITI ES' INCLUDES BOTH TANGIBLE AND INTANGIBLE/INCORPOREAL PROPERTY W HICH IS ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 6 CAPABLE OF ABSTRACTION, CONSUMPTION AND USE AND WHI CH CAN BE TRANSMITTED, TRANSFERRED, DELIVERED, STORED, POSSES SED ETC. THE SOFTWARE PROGRAMMES HAVE ALL THESE ATTRIBUTES.**** *********** 'IN ADVENT SYSTEMS LTD. V. UNISYS CORPN, 925 F. 2D 670 (YCT CIR. 1991), RELIED ON BY MR. SORABJEE, THE COURT WAS CON CERNED WITH INTERPRETATION OF UNIFORM CIVIL CODE WHICH 'APPLIED TO TRANSACTIONS IN GOODS'. THE GOODS THEREIN WERE DEFI NED AS 'ALL THINGS (INCLUDING SPECIALLY MANUFACTURED GOODS) WHI CH ARE MOVEABLE AT THE TIME OF THE IDENTIFICATION FOR SALE '. IT WAS HELD: 'COMPUTER PROGRAMS ARE THE PRODUCT OF AN INTELLECTU AL PROCESS, BUT ONCE IMPLANTED IN A MEDIUM ARE WIDELY DISTRIBUT ED TO COMPUTER OWNERS. AN ANALOGY CAN BE DRAWN TO A COMPA CT DISC RECORDING OF AN ORCHESTRAL RENDITION. THE MUSIC IS PRODUCED BY THE MINISTRY OF MUSICIANS AND IN ITSELF IS NOT A 'G OOD,' BUT WHEN TRANSFERRED TO A LASER-READABLE DISC BECOMES A READ ILY MERCHANTABLE COMMODITY. SIMILARLY, WHEN A PROFESSOR DELIVERS A LECTURE, IT IS NOT A GOOD, BUT, WHEN TRANSCRIBED AS A BOOK, IT BECOMES A GOOD. THAT A COMPUTER PROGRAM MAY BE COPY RIGHTABLE AS INTELLECTUAL PROPERTY DOES NOT ALTER THE FACT TH AT ONCE IN THE FORM OF A FLOPPY DISC OR OTHER MEDIUM, THE PROGRAM IS TANGIBLE, MOVEABLE AND AVAILABLE IN THE MARKETPLACE. THE FACT THAT SOME PROGRAMS MAY BE TAILORED FOR SPECIFIC PURPOSES NEED NOT ALTER THEIR STATUS AS 'GOODS' BECAUSE THE CODE DEFINITION INCLUDES 'SPECIALLY MANUFACTURED GOODS.' 56. A FORTIORARI WHEN ASSESSEE SUPPLIES THE SOFTWAR E WHICH IS INCORPORATED ON A CD, IT HAS SUPPLIED TANGIBLE PROP ERTY AND THE PAYMENT MADE BY THE CELLULAR OPERATOR FOR ACQUIRING SUCH PROPERTY CANNOT BE REGARDED AS A PAYMENT BY WAY OF ROYALTY. 57. IT IS ALSO TO BE BORNE IN MIND THAT THE SUPPLY CONTRACT CANNOT BE SEPARATED INTO TWO VIZ. HARDWARE AND SOFTWARE. W E WOULD LIKE TO REFER THE JUDGMENT OF SUPREME COURT IN CIT VS. SUNDWIGER EMFG CO., 266 ITR 110 WHEREIN IT WAS HELD : 'A PLAIN AND CUMULATIVE READING OF THE TERMS AND CO NDITIONS OF THE CONTRACT ENTERED INTO BETWEEN THE PRINCIPAL TO PRINCIPAL I.E., FOREIGN COMPANY AND MIDHANI I.E., PREAMBLE OF THE C ONTRACT, PART-I AND II OF THE CONTRACT AND ALSO THE SEPARATE AGREEMENT, AS REFERRED TO ABOVE, WOULD CLEARLY SHOW THAT IT WAS O NE AND THE SAME TRANSACTION. ONE CANNOT BE READ IN ISOLATION O F THE OTHER. THE SERVICES RENDERED BY THE EXPERTS AND THE PAYMEN TS MADE TOWARDS THE SAME WAS PART AND PARCEL OF THE SALE CO NSIDERATION AND THE SAME CANNOT BE SEVERED AND TREATED AS A BUS INESS INCOME OF THE NON-RESIDENT COMPANY FOR THE SERVICES RENDERED BY THEM IN ERECTION OF THE MACHINERY IN MIDHANI UNIT A T HYDERABAD. THEREFORE, THE CONTENTION OF THE REVENUE THAT AS TH E AMOUNTS REIMBURSED BY MIDHANI UNDER A SEPARATE CONTRACT FOR THE TECHNICAL SERVICES RENDERED BY A NON RESIDENT COMPA NY, IT MUST BE DEEMED THAT THERE WAS A 'BUSINESS CONNECTION', A ND IT ATTRACTS THE PROVISIONS OF SECTION 9(1)( VII) OF TH E INCOME TAX ACT CANNOT BE ACCEPTED AND THE JUDGMENTS RELIED UPON BY THE REVENUE ARE THE CASES WHERE THERE WAS A SEPARATE AG REEMENT FOR THE PURPOSE OF TECHNICAL SERVICES TO BE RENDERE D BY A FOREIGN COMPANY, WHICH IS NOT CONNECTED FOR THE FULFILMENT OF THE MAIN CONTRACT ENTERED INTO PRINCIPAL TO PRINCIPAL. THIS IS NOT ONE SUCH CASE AND THUS THE CONTENTION OF THE REVENUE CANNOT BE ACCEPTED IN THE CIRCUMSTANCES AND NATURE OF THE TERMS OF THE CONTRACT OF THIS CASE.' 58. NO DOUBT, IN AN ANNEXURE TO THE SUPPLY CONTRACT THE LUMPSUM PRICE IS BIFURCATED IN TWO COMPONENTS, VIZ. , THE CONSIDERATION FOR THE SUPPLY OF THE EQUIPMENT AND F OR THE SUPPLY OF THE SOFTWARE. HOWEVER, IT WAS ARGUED BY THE LEAR NED COUNSEL FOR THE ASSESSEE THAT THIS SEPARATE SPECIFICATION O F THE ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 7 HARDWARE/ SOFTWARE SUPPLY WAS NECESSARY BECAUSE OF THE DIFFERENTIAL CUSTOMS DUTY PAYABLE. 59. BE AS IT MAY, IN ORDER TO QUALIFY AS ROYALTY PA YMENT, WITHIN THE MEANING OF SECTION 9(1) (VI) AND PARTICULARLY C LAUSE (V) OF EXPLANATION-II THERETO, IT IS NECESSARY TO ESTABLIS H THAT THERE IS TRANSFER OF ALL OR ANY RIGHTS (INCLUDING THE GRANTI NG OF ANY LICENSE) IN RESPECT OF COPY RIGHT OF A LITERARY, AL IISTIC OR SCIENTIFIC WORK. SECTION 2 (0) OF THE COPYRIGHT ACT MAKES IT C LEAR THAT A COMPUTER PROGRAMME IS TO BE REGARDED AS A 'LITERARY WORK'. THUS, IN ORDER TO TREAT THE CONSIDERATION PAID BY T HE CELLULAR OPERATOR AS ROYALTY, IT IS TO BE ESTABLISHED THAT T HE CELLULAR OPERATOR, BY MAKING SUCH PAYMENT, OBTAINS ALL OR AN Y OF THE COPYRIGHT RIGHTS OF SUCH LITERARY WORK. IN THE PRES ENCE CASE, THIS HAS NOT BEEN ESTABLISHED. IT IS NOT EVEN THE CASE O F THE REVENUE THAT ANY RIGHT CONTEMPLATED UNDER SECTION 14 OF THE COPYRIGHT ACT,1957 STOOD VESTED IN THIS CELLULAR OPERATOR AS A CONSEQUENCE OF ARTICLE 20 OF THE SUPPLY CONTRACT. DISTINCTION H AS TO BE MADE BETWEEN THE ACQUISITION OF A 'COPYRIGHT RIGHT' AND A 'COPYRIGHTED ARTICLE'. 60. MR. DASTUR IS RIGHT IN THIS SUBMISSION WHICH IS BASED ON THE COMMENTARY ON THE OECD MODEL CONVENTION. SUCH A DIS TINCTION HAS BEEN ACCEPTED IN A RECENT RULING OF THE AUTHORI TY FOR ADVANCE RULING(AAR) IN DASSAULT SYSTEMS KK 229 CTR 125. WE ALSO FIND FORCE IN THE SUBMISSION OF MR DASTUR THAT EVEN ASSUMING THE PAYMENT MADE BY THE CELLULAR OPERATOR IS REGARDED AS A PAYMENT BY WAY OF ROYALTY AS DEFINED IN EXPLANATION 2 BELOW SECTION 9(1) (VI), NEVERTHELESS , IT CAN NEVER BE REGARDED AS ROYALTY WITHIN THE MEANING OF THE SA ID TERM IN ARTICLE 13 PARA 3 OF THE DTAA. THIS IS SO BECAUSE H E DEFINITION IN THE DTAA IS NARROWER THAN THE DEFINITION IN THE ACT , ARTICLE 13(3) BRINGS WITHIN THE AMBIT OF THE DEFINITION OF ROYALY A PAYMENT MADE FOR THE USE OF OR THE RIGHT TO USE A COPYRIGHT OF A LITERARY WORK. THEREFORE, WHAT IS CONTEMPLATED IS A PAYMENT THAT IS DEPENDENT UPON US ER OF THE COPYRIGHT AND NOT A LUMP SUM PAYMENT AS IS THE POSI TION IN THE PRESENT CASE. 61. WE THUS HOLD THAT PAYMENT RECEIVED BY THE ASSES SEE WAS TOWARDS THE TITLE AND GSM SYSTEM OF WHICH SOFTWARE WAS AN INSEPARABLE PARTS INCAPABLE OF INDEPENDENT USE AND IT WAS A CONTRACT FOR SUPPLY OF GOODS. THEREFORE, NO PART OF THE PAYMENT THEREFORE CAN BE CLASSIFIED AS PAYMENT TOWARDS ROYA LTY. IN OUR VIEW, THE AFORESAID JUDICIAL PRONOUNCEMENT C LEARLY SUPPORTS THE PROPOSITION ADVANCED BY THE ASSESSEE I N THE PRESENT CASE. IN FACT, IN SO FAR AS THE FACTUAL ASP ECT IS CONCERNED, THE ASSESSING OFFICER HAS CLEARLY STATED THAT THE COPYRIGHT OF SOFTWARE VESTS ONLY WITH THE CGI GROUP AND THEREFORE, EVEN FROM THAT STANDPOINT, THERE CAN BE NO DIVERGENCE FROM THE ASSESSEES POINT THAT WHAT HAS BEEN TRANSA CTED IN THE LICENSE AGREEMENT IS ONLY THE GRANT OF USER RIGHT I N THE COPYRIGHTED SOFTWARE AND NOT THE USE OF COPYRIGHT I TSELF. THEREFORE, HAVING REGARD TO THE FACT-POSITION AND T HE JUDGMENT OF THE HONBLE DELHI HIGH COURT, WHEREIN THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MOTOROLA INC. (SUPRA) HAS SINC E BEEN APPROVED, THE VIEW OF THE ASSESSEE HAS TO BE UPHELD . 12. BEFORE PARTING, WE MAY REFER TO THE DECISIONS R ELIED UPON BY THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE BEFORE US, NAMELY, THE DECISION OF AUTHORITY IN THE CASE OF IMT LABS ( INDIA) P LTD (SUPRA) AND ALSO OF THE HONBLE KARNATAKA HIGH COUR T IN THE CASE OF CIT V. SAMSON ELECTRONICS CO. LTD 320 ITR 2 09 (KAR). THE HONBLE KARNATAKA HIGH COURT WAS DEALING WITH A CASE OF REQUIREMENT TO DEDUCT TAX AT SOURCE UNDER SECTION 1 95(1) ON AMOUNTS PAID TO FOREIGN SOFTWARE SUPPLIER. AS PER H ONBLE HIGH ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 8 COURT, CONSIDERATION RECEIVED FOR GRANTING OF RIGHT TO USE SOFTWARE UNDER CERTAIN CIRCUMSTANCES COULD BE REGAR DED AS ROYALTY. THE TWO CONTRARY VIEW, NAMELY, THAT THE HONBLE DELHI HIGH COURT ON ONE HAND AND THAT OF THE HONBLE KARN ATAKA HIGH COURT WERE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S SOLID WORKS CORPORATION IN ITA NO 3219/MUM/2 010, ORDER DATED 08.01.2012. THE TRIBUNAL AFTER MAKING F OLLOWING DISCUSSION APPLIED THE VIEW EXPRESSED BY THE HONBL E DELHI HIGH COURT IN THE CASE OF ERICSSON A.B., NEW DELHI (SUPRA), WHICH WAS FAVOURABLE TO THE ASSESSEE:- 8. ON THE ARGUMENT OF THE LD DR THAT WHERE TWO VIE WS ARE AVAILABLE ON AN ISSUE ONE FAVOURABLE TO THE ASS ESSEE SHOULD BE PREFERRED, SHOULD NOT BE APPLIED TO NON- RESIDENT ASSESSEES, WE ARE OF THE VIEW THE SAME CAN NOT BE ACCEPTED IN VIEW OF ARTICLE 24 OF THE DTAA BETWE EN INDIA AND USA WHICH PROVIDES FOR NON-DISCRIMINATION . ARTICLE 24(1) LAYS DOWN THAT NATIONALS OF A CONTRAC TING STATE SHALL NOT BE SUBJECTED IN OTHER CONTRACTING S TATE TO ANY TAXATION OR ANY REQUIREMENT CONNECTED THEREWITH , WHICH IS OTHER OR MORE BURDENSOME THAN THE TAXATION AND CONNECTED REQUIREMENTS TO WHICH NATIONALS OF TH AT OTHER STATE IN THE SAME CIRCUMSTANCES, IN PARTICULA R WITH RESPECT TO RESIDENCE, ARE OR MAY BE SUBJECTED. THIS PROVISION SHALL, NOTWITHSTANDING THE PROVISIONS OF ARTICLE 1, ALSO APPLY TO PERSONS WHO ARE NOT RESIDENTS OF O NE OR BOTH OF THE CONTRACTING STATES. THEREFORE WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE ONE FAVOURABLE TO T HE ASSESSEE AND THE ONE AGAINST THE ASSESSEE, THE VIEW WHICH IS FAVOURABLE TO THE ASSESSEE AND DOES NOT SUPPORT LEVY OF TAX ON THE ASSESSEE SHOULD BE PREFE RRED, SHOULD BE APPLIED TO NON-RESIDENT ASSESSEE IN THIS CASE. ACCORDINGLY, THE CONSIDERATION RECEIVED BY THE ASSE SSEE IN THAT CASE ALLOWING THE USE OF THE SOFTWARE WAS NOT CONSI DERED AS A ROYALTY AND INSTEAD, IT WAS HELD AS BUSINESS RECEIP TS IN THE HANDS OF THE ASSESSEE. THEREFORE, IN THE PRESENT CA SE ALSO WE FIND AMPLE FORCE TO ADOPT A SIMILAR APPROACH AND, T HEREFORE, WE HOLD THAT THE ASSESSEE IS JUSTIFIED IN CANVASSING T HAT THE LICENSE CHARGES EARNED BY IT WAS NOT LIABLE TO BE TREATED A S ROYALTY FOLLOWING THE JUDGEMENT OF THE HONBLE DELHI HIGH C OURT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE HAS TO SUCC EED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 9. WE FIND THE TRIBUNAL WHILE DECIDING THE ISSUE HA S ALSO CONSIDERED THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SAMSUNG ELECTRONICS CO. LTD., (SUPRA) AND A NUMBER OF OTHER DECISIONS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 WHICH IS THE BASIS FOR REOPENING THE ASSESS MENT FOR THE IMPUGNED ASSESSMENT YEAR, WE HOLD THAT THE LICENSE CHARGES E ARNED BY THE ASSESSEE IS NOT LIABLE TO BE TREATED AS ROYALTY. ACCORDINGLY T HE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. ITA NO. 158/PN/2011 (ASSESSMENT YEAR 2007-08) : 10. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : GROUND OF APPEAL NO. 1 : THAT THE HONBLE DRP AND CONSEQUENTIALLY THE LEARN ED ASSESSING OFFICER HAS ERRED IN LAW AND FACTS ON LICENSE CHARG ES RECEIVED UNDER SOFTWARE LICENSE AGREEMENT GRANTING USER RIGHT IN S OFTWARE AS ROYALTY UNDER THE ACT AND UNDER THE INDIA-GERMANY TAX TREAT Y FOR AVOIDANCE OF DOUBLE TAXATION (TAX TREATY), THEREBY ASSESSING T HE TAXABLE INCOME OF ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 9 THE APPELLANT FOR A.Y. 2007-08 AT RS. 11,677,640/- INSTEAD OF THE RETURNED INCOME OF RS. 37,661,320/-. GROUND OF APPEAL NO. 2 : 2.1 THAT THE HONBLE DRP AND CONSEQUENTIALLY THE L EARNED ASSESSING OFFICER HAS ERRED IN LAW AND FACTS REGARD ING THE CONSIDERATION RECEIVED FROM BAJAJ ALLIANZ LIFE INSU RANCE COMPANY LTD. (BA LIFE) AMOUNTING TO RS. 25,983,682 FOR PROVISI ON OF USER RIGHTS OF SOFTWARE OPUS TO BE ROYALTY AS DEFINED IN EXPLA NATION 2 TO SECTION 9(1)(VI) OF THE ACT AND THEREFORE LIABLE TO TAX IN INDIA. 2.2 THAT THE HONBLE DRP AND CONSEQUENTIALLY THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND FACTS IN HOL DING THE CONSIDERATION RECEIVED BY THE APPELLANT FOR PROVISI ON OF USER RIGHTS OF SOFTWARE OPUS TO BA LIFE TO BE ROYALTY UNDER AR TICLE 12 OF THE TAX TREATY AND LEVYING TAX @ 10% ON THE SAME. 2.3 THAT THE HONBLE DRP AND CONSEQUENTIALLY THE LE ARNED ASSESSING OFFICER HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE APPELLANT HAD PROVIDED TO BA LIFE THE USER RIGHTS I N THE COPYRIGHTED ARTICLE (VIZ OPUS) AND NOT RIGHT TO USE THE COPYRIG HT OF OPUS AND THUS CANNOT BE REGARDED AS ROYALTY UNDER THE PROVISION S OF THE ACT AND DTAA. 11. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUN DS RAISED BY THE ASSESSEE IN THE IMPUGNED APPEAL ARE IDENTICAL TO GR OUNDS OF APPEAL IN ITA NO. 157/PN/2011 FOR ASSESSMENT YEAR 2004-05. WE HAVE A LREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE HAVE B EEN ALLOWED. FOLLOWING THE SAME RATIO, THE GROUNDS RAISED BY THE ASSESSEE IN THE ABOVE APPEAL ARE ALLOWED. 6. THE TRIBUNAL HAD ALLOWED THE CLAIM OF THE ASSESSEE IN ASSESSMENT YEARS 2004-05, 2005-06 AND 2007-08. HOWEV ER, THE DEPARTMENT HAS FILED APPEALS BEFORE THE HONBLE BOMBAY HIG H COURT WHICH HAVE BEEN ADMITTED IN RESPECT OF THE AFORESAID ASSE SSMENT YEARS AND THE FOLLOWING SUBSTANTIAL QUESTION OF LAW HAS BEEN FRAMED. A. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE LICENSE FEES RECEIVED BY THE ASSESSEE FOR TRANSFER OF USER RIGHTS OF SOFTWAR E OPUS TO THE INDIAN COMPANIES DID NOT FALL WITHIN THE MEANING OF ROY ALTY AS DEFINED IN EXPLANATION 2 TO SECTION 9(1)(VI) OF THE IN COME TAX ACT, 1961 AND UNDER ARTICLE12 OF THE DOUBLE TAXATION AVOID ANCE AGREEMENT BETWEEN INDIA AND GERMANY (DTAA)? 7. THE APPEALS IN ITA(L) NO.1362 OF 2012 RELATING TO ASSESS MENT YEAR 2005-06, ITA(L) NO.1881 OF 2012 RELATING TO ASSESSMEN T YEAR 2004-05 AND ITA(L) NO.1880 OF 2012 RELATING TO ASSESSMENT YEAR 2007- 08 ARE PENDING FOR DISPOSAL BEFORE THE HONBLE BOMBAY HIGH COURT. ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 10 8. THE ASSESSEE BEFORE US HAS MADE APPLICATIONS UNDER SECTION 158A(1) OF THE ACT FOR BOTH THE CAPTIONED ASSESSMENT YE ARS I.E. 2008- 09 AND 2009-10 POINTING OUT THAT IDENTICAL QUESTION OF LAW HAS BEEN FRAMED BY THE HONBLE BOMBAY HIGH COURT AND THE FINAL DE CISION ON THE SAID QUESTION OF LAW BE APPLIED. IN VIEW THEREOF, THE AS SESSEE CLAIMED THAT IT WOULD NOT RAISE ANY SUCH QUESTION OF LAW BE FORE THE BOMBAY HONBLE HIGH COURT UNDER SECTION 260A OF THE ACT AND / OR HONBLE SUPREME COURT OF INDIA,. THE APPLICATIONS MOVED B Y THE ASSESSEE UNDER FORM NO.8 ARE AVAILABLE ON RECORD, WHICH IN TURN, WERE FORWARDED TO THE ASSESSING OFFICER WHO HAS SUBMITTED REPO RT DATED 22.12.2014. THE ASSESSING OFFICER ON VERIFICATION OF RECORD, HA S REPORTED THAT THE QUESTION OF LAW MENTIONED IN (A) IS INVOLV ED IN THE APPEALS FILED BY THE DEPARTMENT BEFORE THE HONBLE BOMBA Y HIGH COURT FOR THE ASSESSMENT YEARS 2005-06, 2004-05 AND 2 007-08, WHICH IS PENDING FOR DECISION. THE ASSESSING OFFICER FURTHER REPOR TS THAT THE ASSESSEES CLAIM IS CORRECT, HOWEVER, ANOTHER QUESTION OF LAW HAS BEEN ADMITTED FOR ASSESSMENT YEAR 2005-06 ONLY, WHICH DOES NOT ARISE IN THE APPEALS PENDING BEFORE THE TRIBUNAL. 9. THE ISSUE RAISED BY THE ASSESSEE VIDE GROUNDS OF APP EAL NOS.1 TO 3 ARE THUS, DECIDED IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE SEPARATE ORDE RS DATED 14.03.2012, 25.06.2012 AND 25.06.2012 RELATING TO ASSESSMENT YEARS 2005-06, 2004-05 AND 2007-08, RESPECTIVELY, SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HOWEVER, IN V IEW OF THE APPLICATIONS MADE BY THE ASSESSEE IN PRESCRIBED FORM NO. 8 IN TERMS OF SECTION 158A(1) OF THE ACT, THE ASSESSING OFFICER IS FURTHER D IRECTED TO APPLY THE DECISION OF THE HONBLE BOMBAY HIGH COURT AND / OR HONBLE SUPREME COURT OF INDIA ON THE SAID ISSUES BEING DECIDED IN ASSESSEES ITA NO.87/PN/2013 ITA NO.337/PN/2013 ALLIANZ SE 11 OWN CASE, RELATING TO ASSESSMENT YEARS 2005-06, 2004-05 AND 2007- 08. THE GROUNDS OF APPEAL NOS.1 TO 3 ARE THUS, ALLOWED. IN VIEW THEREOF, THE CAPTIONED APPEALS OF THE ASSESSEE ARE ACCOR DINGLY DISPOSED OF. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED, SUBJECT TO THE AFORESAID OBSERVATIONS. ORDER PRONOUNCED ON THIS 20 TH DAY OF FEBRUARY, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 20 TH FEBRUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE DRP, PUNE; 4) THE CONCERNED CIT(A); 5) THE CIT CONCERNED; 6) THE DR B BENCH, I.T.A.T., PUNE; 7) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE