TRIMBLE SOLUTIONS CORPORATION, MUMBAI V. DCIT(IT)-4(1)(2), MUMBAI

ITA 6481/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0409 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 03-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DIVESH CHAWLA S H ANBU SELVAM
• Keywords: Business income; Double taxation relief; Period of limitation; Permanent establishment; Advance ruling; Wholly owned subsidiary
• Section: 271(1)(c); 143(3); 234B; 201; 143(2); 264; 13

Judgement Text

P A G E | 1 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR , VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 6481 /MUM/201 7 (ASSESSMENT YEAR: 201 0 - 11 ) ITA NO. 6482 /MUM/201 7 (ASSESSMENT YEAR: 201 1 - 12 ) TRIMBLE SOLUTIONS CORPORATION C/0 SRBC & ASSOCIATES LLP, 14 TH FL OOR ., THE RUBY 29 SENAPATI BAPAT MARG, DADAR (W), MUMBAI - 400 028. VS. DEPUTY COMMISSIONER OF INCOME TAX , CIR (IT)( 4 )( 1 )( 2 ), MUMBAI, ROOM NO. 160 9 , 16 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400 021. PAN AA DCT2639Q (APPELLANT) (RESPONDENT) APPELLANT BY: SH. DIVESH CHAWLA RESPONDENT BY: S H . ANBU SELVAM DATE OF HEARING: 19 - 09 - 2019 DATE OF PRONOUNCEMENT: 1 6 - 12 - 2019 O R D E R PER RAVISH SOOD, JM THE CAPTIONED APPEAL S FILED BY THE ASSESSEE COMPANY ARE DIRECTED AGAINST THE RESPECTIVE ORDER S PASSED BY THE A.O UNDER SEC. 144C(1 3 ) R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT) FOR ASSESSMENT YEARS 2010 - 11 AND 2011 - 12, BOTH DATED 31.08.2017 . AS THE ISSUES IN VOLVED IN THE CAPTIONED APPEALS ARE INEXTRICABLY INTERLINKED AND INTERWOVEN, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OF F BY WAY OF A COMMON ORDER. WE SHALL FIRST ADVERT TO THE APPEAL OF THE ASSESSEE FOR A.Y 20101 - 11. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US : P A G E | 2 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TRIMBLE SOLUT IONS CORPORATION (HEREINAFTER REFERRED TO AS THE' APPELLANT' OR 'TRIMBLE CORPORATION') RESPECTFULLY CRAVES TO PREFER AN APPEAL AGAINST THE ORDER PASSED UNDER SECTION 144C(13) READ WITH SECTION 143(3) OF THE INCOME - TAX ACT, 1961 ('THE ACT') BY THE DEPUTY CO MMISSIONER OF INCOME - TAX (INTERNATIONAL TAXATION) - 4(1)(2), MUMBAI (HEREINAFTER REFERRED TO AS THE 'AO') DATED 31 AUGUST 2017 (RECEIVED ON 8 SEPTEMBER 2017) IN PURSUANCE OF THE DIRECTIONS ISSUED BY THE HON'BLE DISPUTE RESOLUTION PANEL - 2, MUMBAI (HEREI NAFTER REFERRED TO AS THE 'DRP') ON THE FOLLOWING GROUNDS: GENERAL GROUND 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AA HAS ERRED IN DETERMINING THE TOTAL TAXABLE INCOME OF THE APPELLANT FOR THE SUBJECT AY AT RS 10,04,18,820 AS AGAINST 'NIL' INCOME REPORTED IN THE RETURN OF INCOME FILED BY THE APPELLANT FOR THE SUBJECT AY; INVALID SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN NOT VALIDLY SERVING THE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME - IIMIT PRESCRIBED UNDER SECTION 143(2) OF THE ACT; TIME - BARRING ASSESSMENT PROCEEDINGS 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN PASSING ORDER UNDER SECTION 143(3) OF THE ACT BEYOND THE TIME LIMIT FOR COMPLETION OF SUCH PROCEEDINGS AS PER THE PROVISIONS OF CLAUSE (VIII) OF EXPLANATION 1 OF SECTION 153 OF THE ACT; TAXABILITY OF RECEIPT FROM SALE OF 'OFF - THE SHELF' SOFTWARE AMOUNTING TO RS 7,81,72,583 AS 'ROYALTY' 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AT) HAS ERRED IN HOLDING THAT PAYMENTS OF RS 7,81,72,583 RECEIVED BY THE APPELLANT TOW ARDS SALE OF 'OFF - THE SHELF SOFTWARE ARE IN THE NATURE OF 'ROYALTY' AS PER THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT; 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AA HAS ERRED IN HOLDING THAT PAYMENTS OF RS 7,81,72,583 RECEIVED BY TH E APPELLANT TOWARDS SALE OF 'OFF - THE SHELF SOFTWARE ARE IN THE NATURE OF 'ROYALTY' UNDER ARTICLE 13 OF THE INDIA - FINLAND TAX TREATY; TAXABILITY OF RECEIPT FROM MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) AMOUNTING TO RS 2,22,46,237 AS 'ROYALTY ' 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN HOLDING THAT PAYMENTS OF RS 2,22,46,237 RECEIVED BY THE APPELLANT TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) ARE IN THE NATURE OF 'ROYALTY' AS PER THE PROVISI ONS OF SECTION 9(L)(VI) OF THE ACT; 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN HOLDING THAT PAYMENTS OF RS 2,22,46,237 RECEIVED BY THE APPELLANT TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) ARE IN THE NAT URE OF 'ROYALTY' UNDER ARTICLE 13 OF THE INDIA - FINLAND TAX TREATY; INTEREST UNDER SECTION 234A OF THE ACT 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN COMPUTING INTEREST UNDER SECTION 234A OF THE ACT FOR 18 MONTHS INSTEAD OF 16 MONTHS; INTEREST UNDER SECTION 234B OF THE ACT P A G E | 3 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT; AND PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 27I(L)(C) OF THE ACT. THE APPELLANT RESPECTFULLY SUBMITS THAT THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. THE APPELLANT FURTHER PRAYS THAT ANY OTHER RELIEF AS THE HON'BLE ITAT MAY DEEM FIT BE GRANTED. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, OMIT OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT THE TIME OF THE APPEAL, TO ENABLE THE HON'BLE ITAT TO DECIDE THE APPEAL ACCORDING TO LAW. 2. BRIEFLY STATED, THE ASSESSEE WHICH IS A FOREIGN COMPANY INCORPOR ATED IN FINLAND IS ENGAGED IN THE BUSINESS OF DEVELOPING AND MARKETING SPECIALIZED OFF - THE - SHELF SOFTWARE PRODUCTS WHICH ARE USED IN INDUSTRIES LIKE BUILDING AND CONSTRUCTION, ENERGY DISTRIBUTION AND INFRASTRUCTURE MANAGEMENT . IN INDIA, THE ASSESSEE MARKET S AND DISTRIBUTES THE SPECIALIZED SOFTWARE PRODUCTS TO THE END USER CUSTOMERS THROUGH A DISTRIBUTION CHANNEL CONSISTING OF ITS SUBSIDIARY AND A THIRD PARTY DISTRIBUTOR. RETURN OF INCOME FOR A.Y 2010 - 11 WAS FILED BY THE ASSESSEE COMPANY ON 31.03.2012, DECLA RING ITS TOTAL INCOME AT RS. NIL. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE IN ORDER TO FACILITATE DISTRIBUTION OF ITS SOFTWARE PRODUCTS IN INDIA HAD APPOINTED ITS WHOLLY OWNED SUBSIDIARY COMPANY VIZ. M/S TRIMBLE SOLUTIONS INDIA PRIVATE LIMITED (EARLIER KNOWN AS TEKLA INDIA PVT. LTD.), VIDE AN AGREEMENT DATED 28.01.2008 AND M/S DOWCOMAX SERVICES INDIA LIMITED, VIDE AN AGREEMENT DATED 23.06.2008, AS ITS NON - EXCLUSIVE RESELLERS/DISTRIBUTORS FOR THE INDIAN TERRITORY. ON A PERUSAL OF THE RECORDS, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD DURING THE YEAR RECEIVED THE FOLLOWI NG PAYMENTS FROM ITS DISTRIBUTORS : SR. NO. PARTICULARS AMOUNT 1. PAYMENT RECEIVED FOR SALE OF OFF - THE SHELF SOFTWARE RS. 7,81,72,583/ - 2. PAYMENT RECEIVED FOR MAINTENANCE AND SUPPORT SERVICES (INCLUDING RS. 2,22,46,237/ - P A G E | 4 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) UPGRADES) 3. PAYMENT RECEIVED FOR MANAGEMENT FEES RS. 31,86,724/ - TOTAL RS. 10,36,05,544/ - IN THE COURSE OF THE DRAFT ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD IN THE LAST WEEK OF JULY, 2016 ORALLY INFORMED THE A.O THAT IT HAD FILED AN APPLICATION DATED 19/10/2012 UNDER SEC. 245Q(1) OF THE ACT BEFORE THE AUTHORITY OF ADVANCE RULING (FOR SHORT AAR) FOR SEEKING AN ADVANCE RULING ON TAXABILITY OF SOFTWARE PAYMENTS RECEIVED BY IT FROM INDIA , WHICH APPLICATION WAS HOWEVER SUBSEQUENTLY WITHDRAWN BY IT. AS THE ORDER OF AAR ALLOWING THE WITHDRAWAL OF THE APPLICATION BY THE ASSES S EE WAS NOT RECEIVED BY EITHER THE OFFICE OF THE A.O OR THAT OF THE JURISDICTIONAL CIT(IT) - 4, MUMBAI, FROM THE OFFICE OF AAR, THEREFORE, ON THE BASIS OF THE INF ORMATION PROVIDED BY THE ASSESS EE A LETTER DATED 02/08/2016 WAS WRITTEN BY THE A.O TO THE A AR FOR AN OFFICIAL COPY OF ITS ORDER. ON 12/08/2016, THE CIT(IT) - 4, MUMBAI ALSO WROTE TO THE SECRETARY, AAR NEW DELHI AND SOUGHT A COPY OF THE ORDER OF THE AAR. ORDER OF THE AAR ALLOWING THE WITHDRAWAL OF APPLICATION BY THE ASSESSEE WAS RECEIVED BY THE CIT (IT) - 4, MUMBAI ON 29/08/2016 . OBSERVING, THAT SINCE THE ORDER OF THE AAR WAS RECEIVED BY THE CIT(IT) - 4, MUMBAI OFFICE ON 29/08/2016, THEREFORE, THE A.O WAS OF THE VIEW THAT AS PER CLAUSE (VIII) OF EXPLANATION 1 TO SEC.153 OF THE ACT, THE ASSESSMENT COULD B E VALIDLY FRAMED UPTO 31/10/2016. ON THE CONTRARY, IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE ORDER OF AAR WAS RECEIVED BY THE A.O (AS ORALLY CONFIRMED BY HIM) ON 24/02/2015, THEREFORE, THE DRAFT ASSESSMENT ORDER COULD HAVE BEEN PASSED LATEST BY 30/08/20 15, WHICH NOT HAVING BEEN PASSED WITHIN THE SAID STIPULATED TIME PERIOD WAS THUS BARRED BY LIMITATION. IN SUPPORT OF ITS AFORESAID CLAIM THE ASSESSEE HAD FILE D WITH THE A.O A COPY OF THE DE SPATCH REGISTER OBTAINED FROM THE OFFICE OF THE AAR. REBUTTING T HE AFORESAID CLAIM OF THE ASSESSEE, IT WAS OBSERVED BY THE A.O THAT AS THE WITHDRAWAL ORDER DATED 17/02/2015 OF THE AAR WAS RECEIVED BY THE JU RISDICTIONAL CIT(IT) - 4, MUMBAI FOR THE FIRST TIME ON 29/08/2016, THEREFORE, AS PER THE PROVISIONS OF CLAUSE (VIII) OF EXPLANATION 1 TO SEC. 153 OF THE ACT, THE ASSESSMENT COULD BE VALIDLY FRAMED UPTO 31/10/2016. ALSO, IT WAS OBSERVED BY THE A.O THAT MERELY PROVIDING A COPY OF THE D ESPATCH REGISTER THAT WAS OBTAINED BY THE ASSESSEE FROM THE OFFICE OF THE AAR COULD NOT BE TAKEN AS A PROOF OF P A G E | 5 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) SERVICE OF THE AARS ORDER. ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O REJECTED THE CLAIM OF THE ASSESSEE THAT THE DRAFT ASSESSMENT ORDER WAS BARRED BY LIMI TATION. 4. ON MERITS, THE ASSESSEE DRAWING SUPPORT FROM THE TERMS AND CONDITIONS OF ITS RESPECTIVE AGREEMENTS WITH ITS NON - EXCLUSIVE RESELLERS/DISTRIBUTORS FOR THE INDIAN TERRITORY, VIZ. (I). M/S TRIMBLE SOLUTIONS INDIA PRIVATE LIMITED (EARLIER KNOWN A S TEKLA INDIA PVT. LTD.); AND (II). M/S D OWCOMAX SERVICES INDIA LIMITED, HAD SUBMITTED BEFORE THE A.O THAT IT EXCLUSIVELY OWNED ALL THE INTELLECTUAL PROPERTY RIGHTS (I PR) IN RELATION TO THE SOFTWARE AND HAD MERELY GRANTED THE DISTRIBUTORS THE RIGHT TO DIST RIBUTE A COPYRIGHTED ARTICLE AND NOT THE COPYRIGHT IN THE ARTICLE. ACCORDINGLY, IT WAS THE CLAIM OF THE ASSESSEE THAT THE DISTRIBUTORS DID NOT US E OR HAD ANY RIGHT TO USE THE COPYRIGHT IN THE SOFTWARE PR OGRAMME. REFERRING TO ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE DEFINITION OF THE TERM ROYALTY THEREIN ENVISAGED RECEIPT OF PAYMENTS OF ANY KIND AS A CONSIDERATION FOR THE USE OF OR THE RIGHT TO USE CERTAIN SPECIFIC WORKS WHICH COULD INCLUDE INTELLECTUAL PROPERTIES (SUCH AS COPYRIGHT, PATENTS ETC.) BY THE OWNER OF SUCH INTELLECTUAL PROPERTIES FROM ANY OTHER PERSON. ALSO, IT WAS SUBMITTED BY THE ASSESSEE THAT THE INDIA - F INLAND TAX TREATY DID NOT CONTAIN A DEFINITION OF SUCH INTELLECTUAL PROPERTIES THAT WERE INCLUDED WITHIN THE SCOPE OF ROYALTY. AS SUCH, IT WAS THE CLAIM OF THE ASSESSEE THAT THE SOFTWARE PRODUCTS PROVIDED TO ITS DISTRIBUTORS WAS FOR THE PURPOS E OF RESALE /DISTRIBUTION TO THE END USER CUSTOMERS FOR USE AS A COPYRIGHTED A RTICLE (I.E SOFTWARE PRODUCTS) AND THERE WAS NO RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SOFTWARE. ON THE BASIS OF THE AFORESAID FACTS, IT WAS SUBMITTED BY THE ASSESSEE THAT THE AMOUNTS RECEIVED FROM ITS DISTRIBUTORS WERE NOT IN THE NATURE OF ROYALTY BUT IN THE NATURE OF SALES REVENUE THAT WAS COLLECTED FROM THEM. IT WAS SUBMITTED BY THE ASSESSEE, THAT FOR THE PURPOSE OF CATEGORIZING AN INCOME FROM A TRANSACTION AS AMOUNTING TO ROYALTY WHAT IS TO BE SEEN IS AS TO WHETHER THE TRANSFEREE HAS THE RIGHT OF COMMERCIAL EXPLOITATION OF THE INTELLECTUAL PROPERTY CONTAINED THEREIN . IT WAS CLAIMED THAT AS THE ASSESSEE HAD ONLY GRANTED THE RIGHT TO DISTRIBUTE THE SOFTWARE PRODUCTS AND NOT ANY RIG HT TO REPR ODUCE OR MAKE COPIES OF THE SOFTWARE PRODUCT, THEREFORE, THE AMOUNTS RECEIVED FROM ITS DISTRIBUTORS COULD NOT BE HELD A ROYALTY IN ITS HANDS. ALSO DRAWING SUPPORT FROM THE COPYRIGHT ACT, IT WAS SUBMITTED BY THE ASSESSEE THAT A TRANSFER OF THE M ATERIAL OBJECT (I.E THE SOFTWARE PRODUCT) WHICH IS THE SUBJECT OF COPYRIGHT DID NOT NECESSARILY INVOLVED A P A G E | 6 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) TRANSFER OF THE COPYRIGHT. ACCORDINGLY, IT WAS THE CLAIM OF THE ASSESSEE THAT THE RIGHT ACQUIRED BY THE TRANSFEREE FROM THE SALE OF THE SOFTWARE WAS TO USE THE COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCT) AND NOT THE RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SOFTWARE. IN ORDER TO SUPPORT ITS AFORESAID CLAIM, THE ASSESSEE ALSO RE LIED ON PARA 14.4 OF THE OECD COMMENTARY. AS SUCH, IT WAS THE CLAIM OF THE ASSESSEE THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS FOR SALE OF A COPYRIGHTED ARTICLE DID NOT TANTAMOUNT TO ROYALTY UNDER THE PROVISIONS OF INDIA - FINLAND TAX TREATY. AS REGARDS THE EXIGIBILITY TO TAX OF THE AMOUNTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS, IT WAS SUBMITTED BY THE ASSESSEE THAT AS THE TERM ROYALTY H AS BEEN DEFINED UNDER ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, THEREFORE, THE INSERTIO N OF EXPLA NA TION 4 TO SEC. 9(1)(VI) OF THE ACT, VIDE THE FINANCE ACT, 2012 W.R.E.F 01.06.1976 CANNOT BE READ INTO THE INDIA - FINLAND TAX TREATY BY RESORTING TO ARTICLE 3 OF THE INDIA - FINLAND TAX TREATY . AS SUCH, IT WAS SUBMITTED BY THE ASSESSEE THAT THE BENEFICIAL PROVISIONS OF THE TAX TREATY WOULD BE APPLICABLE AS PER THE PROVISIONS OF SEC. 90(2) OF THE ACT. IN SUM AND SUBSTANCE, IT WAS THE CLAIM OF THE ASSESSEE THAT AS PER THE BENEFICIAL PROVISIONS OF THE INDIA - FINLAND TAX TREATY, THE PAYMENTS RECEIVED FROM ITS DISTRIBUTORS FOR SALE OF OFF - THE SHELF SOFTWARE LICENSE CANNOT BE HELD TO BE IN THE NATURE OF ROYALTY PAYMENT. HOWEVER, THE A.O WAS NOT PERSUADED TO SUBSCRIBE TO THE AFORESAID CLAIM OF THE ASSESSEE. ON THE BASIS OF RELIANCE PLACED ON CERTAIN JUD ICIAL PRONOUNCEMENTS THE A.O REJECTED THE CLAIM OF THE ASSESSEE THAT THE PAYMENTS FOR OFF - THE - SHELF SOFTWARE WER E TOWARDS SALE OF A COPYRIGHTED ARTICLE . IT WAS OBSERVED BY THE A.O THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS WERE IN N ATURE OF ROYALTY FOR CERTAIN REASONS, VIZ. (I). THAT, SEC. 14 OF THE COPYRIGHT ACT STATED THAT TRANSFER OR USE OF A COPYRIGHT IN A COMPUTER PROGRAM MANIFESTS ITSELF IN (A ). ALLOWING THE COMPUTER PROGRAM TO BE STORED ON A ME DIUM BY ELECTRONIC MEANS; OR (B ). S ELLING OR PROVIDING THE COMPUTER PROGRAM ON COMMERCIAL RENTAL. ACCORDINGLY, THE A.O WAS OF THE VIEW THAT A MERE GRANT OF ANY RIGHT IN A COPYRIGHT AS MENTIONED IN SEC. 14 OF THE COPYRIGHT ACT WOULD SUFFICE TO FULFIL THE CONDITION OF CLAUSE (V) OF EXPL ANATION 2 TO SEC. 9(1)(VI) OF THE ACT. IT WAS OBSERVED BY THE A.O, THAT THE ACTS OF THE ASSESSEE AND THE DISTRIBUTION UNDER THE AGREEMENTS TO THE END USER CUSTOMERS THROUGH ITS DISTRIBUTORS INDICATED THE TRANSFER OR USE OF SOME OF THE COPYRIGHTS AS MENTI ONED IN SEC. 14 OF THE COPYRIGHT ACT BY THE ASSESSEE TO THE DISTRIBUTORS. ALSO, RELYING UPON THE EXPLANATION 4 AND 5 TO SEC. 9(1)(VI), AS HAD BEEN MADE AVAILABLE ON THE STATUTE VIDE THE FINANCE ACT, 2012 W.R.E.F P A G E | 7 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 01.06 .1976, THE A.O WAS OF THE VIEW THAT AFT ER THE AMENDMENT IT COULD SAFELY BE CONCLUDED THAT TRANSFER OF ALL OR ANY RIGHTS TO USE A COMPUTER SOFTWARE (INCLUDING THE GRANT OF A LICENSE) FELL WITHIN THE AMBIT OF T H E TERM ROYALTY UNDER SEC. 9(1)(VI) OF THE ACT. FURTHER, THE A.O WAS OF THE VIEW THA T THE DEFINITION OF ROYALTY UNDER ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY W A S SIMILAR TO THE DEFINITION OF ROYALTY UNDER THE PROVISIONS OF THE ACT , AND THE INSERTION OF EXPLANATIONS 3 , 4, 5 AND 6 TO THE DEFINITION OF ROYALTY UNDER THE ACT HAD NOT EXPANDED THE SCOPE OF ROYALTY UNDER THE INDIA - FINLAND TAX TREATY. FURTHER, THE A.O OBSERVED THAT THE DOCTRINE OF UPDATING CONSTRUCTION WAS REQUIRED TO BE APPLIED TO THE TAX TREATY AND TO T HE TERMS APPEARING IN THE TAX TREATY WHICH NOT HAVING BEEN EXPRESSLY DEFINED IN THE TREATY WERE TO BE UNDERSTOOD WITH THE CHANGING ENVIRONMENT. 5. FURTHER, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD ALSO PROVIDED SOFTWARE UPGRADES, MAINTENANCE AND SUPPORT SERVICES WITH REGARD TO ITS SOFTWARE, VIZ. TRIMBLE SOFTWARE TO THE DISTRIBUTORS, WHO IN TURN PROVIDE D TH E SAME TO THE END USER CUSTOMER , AS AND WHERE SUCH END USER CUSTOMER HAD ENTERED INTO A MAINTENANCE AG REEMENT WITH THE DISTRIBUTORS. IT WAS OB SERVE D BY THE A.O THAT THE ASSESSEE DURING THE YEAR WAS I N RECEIPT OF A PAYMENT OF RS. 2,22,46,237/ - TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES). IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE PAYMENTS RECEIVED FOR SOFTWARE UPGRADES, MAINTE NANCE AND SUPPORT SERVICES WITH REGARD TO ITS SOFTWARE WERE NOT FOR TRANSFER OF ANY RIGHT IN THE COPYRIGHT OF THE ARTICLE, THEREFORE, THE SAME COULD NOT BE HELD AS ROYALTY UNDER THE INDIA - FINLAND TAX TREATY AS WELL AS UNDER THE ACT. HOWEVER, THE A.O REJE CTED THE AFORESAID CLAIM OF THE ASSESSEE. OBSERVING, THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FOR MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) WERE A PART OF AND INEXTRICABLY LINKED TO THE SUPPLY AND USE OF THE SOFTWARE , THE A.O WAS OF THE VIEW THAT THE SAME WERE ALSO IN THE NATURE OF ROYALTY AS PER THE EXPLANATION 2 TO SEC. 9(1 ) (VI) OF THE ACT. 6. ON THE BASIS OF HIS AFORESAID OBSERVATIONS, THE A.O, VIDE HIS DRAFT ASSESSMENT ORDER PASSED UNDER SEC. 144C(1) R.W.S 143(3), DATED 26.10.2016 BEING OF THE VIEW THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FOR SALE OF SPECIALIZED SOFTWARE AND MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) WERE IN THE NATURE OF ROYALTY, PROPOSED TO TAX THE SAME AT 10% AS PER C L AUSE 2 OF ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY. P A G E | 8 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 7. THE ASSESSEE OBJECTED TO THE ADDITIONS PROPOSED BY THE A.O, VIDE HIS DRAFT ASSESSMENT ORDER PASSED UNDER SEC.144C(1) R.W.S 143(3), DATED 26.10.2016, BEFORE THE DISPUTE RESOLUTION PANEL - 2, MUMBAI (FO R SHORT DRP). AS REGARDS THE CLAIM OF THE ASSESSEE THAT THE ASSESSMENT FRAMED BY THE A.O WAS BARRED BY LIMITATION, THE DRP AFTER NECESSARY DELIBERATIONS AND PERUSING THE RECORDS DID NOT FIND FAVOUR WITH THE SAME. IT WAS OBSERVED BY THE DRP, THAT CONTRARY TO THE OBSERVATION OF THE A.O THAT THE WITHDRAWAL LETTER DATED 17/02/2015 WAS ISSUED BY THE AAR TO CIT(IT) - II, NO SUCH LETTER WRITTEN BY THE AAR TO CIT(IT) - II WAS FOUND AVAILABLE ON RECORD. RATHER, IT WAS OBSERVED BY THE DRP THAT A LETTER DATED 29/08/2016 COMMUNICATING THE ORDER OF THE AAR TO THE CIT(IT) - 4, MUMBAI, WHICH WAS RECEIVED ON 30.08.2016 WAS FOUND AVAILABLE ON RECORD. IN THE BACKDROP OF THE AFORESAID FACTS, THE DRP WAS OF THE VIEW THAT IT COULD SAFELY BE CONCLUDED THAT THE WITHDRAWAL ORDER OF THE AAR, DATED 17.02.2015 WAS RECEIVED BY THE JURISDICTIONAL CIT I.E CIT(IT) - 4, MUMBAI, ON 30/08/2016. ON THE BASIS OF ITS AFORESAID DELIBERATIONS, THE DRP WAS OF THE VIEW THAT THE A.O HAD RIGHTLY CONCLUDED THAT THE LAST DATE OF COMPLETING THE ASSESSMENT WOUL D BE 31/10/2016. ACCORDINGLY, THE DRP REJECTED THE AFORESAID OBJECTION OF THE ASSESSEE. AS REGARDS THE VIEW TAKEN BY THE A.O THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS FOR SALE OF SPECIALIZED SOFTWARE AND MAINTENANCE AND SUPPORT SERVI CES (INCLUDING UPGRADES) WERE IN THE NATURE OF ROYALTY WHICH THUS WERE TO BE TAXED AT 10% AS PER CLAUSE 2 OF ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, THE DRP DID NOT FIND ANY INFIRMITY IN THE SAME AND REJECTED THE OBJECTION OF THE ASSES S EE. 8. AFTER RECEIVING THE ORDER OF THE DRP UNDER SEC. 144C(5), DATED 31.07.2017, THE A.O VIDE HIS FINAL ASSESSMENT ORDER UNDER SEC. 144C(13) R.W.S 143(3), DATED 31/08/2017, THEREIN TREATING THE AMOUNTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS FOR SALE OF S PECIALIZED SOFTWARE OF RS. 7,81,72,583/ - AND MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) OF RS. 2,22,46,237/ - AS BEING IN THE NATURE OF ROYALTY, THEREIN INCLUDED THE SAME IN THE TOTAL INCOME OF THE ASSESSEE AND DETERMINED ITS INCOME AT RS. 10,0 4,18,820/ - . 9 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE A.O UNDER SEC. 144C(13) R.W.S 143(3), DATED 31/08/2017, HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AFTER ARGUING AT SOM E LENGTH SUBMITTED THAT HE P A G E | 9 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) WAS NOT PRESSING GROUND OF APPEAL NO. 2. AS PER THE CONCESSION OF THE LD. A.R, THE GROUND OF APPEAL NO. 2 IS DISMISSED AS NOT PRESSED. AS REGARDS THE VALIDITY OF THE ASSESSMENT ORDER, IT WAS SUBMITTED BY THE LD. A.R THAT THE SAME HAVING BEEN PASSED BEYOND THE EXTENDED TIME LIMIT PRESCRIBED IN CLAUSE (VIII) OF EXPLANATION 1 OF SEC. 153 WAS THUS BARRED BY LIMITATION. IN ORDER TO SUPPORT HIS AFORESAID CLAIM THE LD. A.R TOOK US THROUGH THE CHRONOLOGY OF EVENTS AT PAGE 31 OF THE ASSESSES PAPER BOOK (FOR SHORT APB). IT WAS THE CLAIM OF THE LD. A .R THAT THE WITHDRAWAL ORDER OF THE AAR WAS DESPATCHED TO THE CIT(IT) - II, MUMBAI ON 20/02/2015. IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION THE LD. A.R HAD DRAWN OUR ATTENTION TO TH E COPY OF THE DESPATCH REGISTER OF AAR OFFICE AT P AGE 33 OF THE APB. IT WAS SUBMITTED BY THE LD. A.R THAT THE AAR ORDER WAS RECEIVED BY THE ASSESSEE ON 25/02/2015. FURTHER, IT WAS CLAIMED BY THE LD. A.R THAT AS ORALLY CONFIRMED BY THE A.O THE AAR ORDER WAS RECEIVED BY THE TAX AUTHORITIES ON 24/02/2015. ON BEING CALLED UPON TO SUBSTANTIATE ITS CLAIM THAT THE ORDER OF THE AAR WAS RECEIVED BY THE TAX AUTHORITIES ON 24/02/2015, THE LD. A.R HAVING FAILED TO DO SO, THUS DID NOT STRESS UPON HIS SAID CLAIM ANY FURTHER . RELYING ON THE ORDERS OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT - 7 VS. ODEON BUILDES PVT. LTD. (2017) 393 ITR 0027 (DELHI) (FB) A ND GE ENERGY PARTS INC. VS. THE DEPUTY COMMISSIONER OF INCOME TAX & ANR. [W.P(C) 5577/2018; DATED 20.08.2019] , IT WAS SUBMITTED BY THE LD. A.R THAT ONCE AN ORDER WAS SERVED UPON THE REVENUE, THE PERIOD OF TIME LIMITATION WOULD COMMENCE T HEREFROM AND THE REVENUE CANNOT BE PERMITTED TO RAISE A PLEA THAT THE ORDER WAS NOT SERVED UPON THE JURISDICTIONAL CIT. ALSO, DRAWING SUPPORT FROM THE OBSERVA TIONS OF THE HONBLE HIGH COURT IN THE AFORESAID JUDICIAL PRONOUNCEMENTS, IT WAS AVERRED BY THE LD. A.R THAT AS THE COUNSEL OF THE DEPARTMENT WAS PRESENT AT THE TIME OF THE PRONOUNCEMENT OF THE AAR ORDER, THEREFORE, IT COULD SAFELY BE CONCLUDED THAT THE DEPARTMENT/REVENUE WAS AWARE OF THE ORDER AND FOR THE PURPOSE OF WORKING OUT THE PERIOD OF LIMITATION IT WAS IRRELEVANT AS TO WHEN THE CONCERNED CIT OR PR. CIT WAS MADE AWARE OF THE SAID ORDE R. ON THE BASIS OF HIS AFORESAID CONTENTIONS, IT WAS SUBMITTED BY THE LD. A.R THAT AS THE ORDER OF WITHDRAWAL OF THE AAR WAS PASSED ON 17/02/2015 AND THEREAFTER WAS DESPATCHED TO CIT (IT) - II, MUMBAI ON 20/02/2015, THEREFORE, THE DRA F T ASSESSMENT ORDER PASSE D BY THE A.O WAS BEYOND THE PERIOD CONTEMPLATED IN CLAUSE (V II I) OF EXPLANATION 1 TO SEC. 153 OF THE ACT. ALSO, SUPPORT WAS DRAWN BY THE LD. A.R ON THE ORDER OF THE ITAT MUMBAI BENCH B IN COLOR CRAFT VS. ITO - 16(2)(4), MUMBAI [2016] 68 TAXMANN.COM 409 (MUM). P A G E | 10 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 10. WE HAVE DELIBERATE D AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE CLAIM OF THE LD. A.R THAT THE DRAFT ASSESSMENT ORDER HAVING BEEN PASSED BY THE A.O UNDER SEC. 144C(1) R.W.S 143(3), DATED 2 6/ 10/2016 WAS BEYOND THE PRESCRIBED TIME LIMIT ENVISAGED IN CLAUSE (VI II ) OF EXPLANATION 1 TO SEC. 153 OF THE ACT . AS OBSERVED BY US HEREINABOVE, IT WAS THOUGH INITIALLY CANVASSED BY THE LD. A.R BEFORE US THAT AS ORALLY CONFIRMED BY THE A.O THE ORDER OF WI THDRAWAL OF AAR WAS RECEIVED BY THE REVENUE ON 20/02/2015. HOWEVER, AS THE LD. A.R ON BEIN G CALLED UPON TO SUBSTANTIATE HI S SAID CLAIM HAD FAILED TO DO SO, THEREFORE, HE HAD THEREAFTER NOT STRESSED UPON THE SAME ANY FURTHER. APART THEREFROM, AS THE AFORESA ID CLAIM OF THE LD. A.R IS ABSOLUTELY UNSUBSTANTIATED AND NO ATTEMPT HAS BEEN MADE TO SUPPORT THE SAME BY WAY OF AN AFFIDAVIT AS REQUIRED BY RULE 10 OF THE APPELLATE TRIBUNAL RULES, 1962, THEREFORE, THE SAME EVEN OTHERWISE DOES NOT MERIT TO BE TAKEN COGN IZANCE BY US. WE SHALL NOW ADVERT TO THE CLAIM OF THE LD. A.R THAT AS PER THE DESPATCH REGISTER THE WITHDRAWAL ORDER OF THE AAR WAS DESPATCHED TO THE CIT(IT) - II, MUMBAI ON 20/02/2015. IT WAS THE CLAIM OF THE LD. A.R THAT AS THE ORDER OF WITHDRAWAL OF THE AAR WAS RECEIVED BY THE CIT(IT) - II, MUMBAI, THE PERIOD OF LIMITATION WOULD NOT CEASE TO RUN ONLY BECAUSE THE CONCERNED CIT(IT) - 4 , MUMBAI HAD NOT RECEIVED THE SAID ORDER. IN SUM AND SUBSTANCE, WE FIND THAT IT IS THE C LAIM OF THE LD. A.R THAT NOW WHEN THE REVENUE WAS PUT TO NOTICE AND HAD KNOWLEDGE ABOUT THE ORDER OF WITHDRAWAL OF AAR, THE PERIOD OF LIMITATION WOULD COMMENCE AND IT WAS IMMATERI AL THAT THE CONCERNED CIT(IT) - 4 , MUMBAI HAD NOT RECEIVED THE SAID ORDER. AS O BSERVED BY US HEREINABOVE, THE LD. A. R. IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION HAD RELIED ON THE ORDER OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT - 7 VS. ODEON BUILDES PVT. LTD. (2017) 393 ITR 0027 (DELHI) (FB) . WE HAVE GIVEN A THOUGHTF UL CONSIDERATION TO THE FACTS OF THE CASE BEFORE US AND ARE UNABLE TO FIND OURSELVES T O BE IN AGREEMENT WITH THE AFORESAID CLAIM OF THE ASSESSEE. ALTHOUGH, THE LD. A.R HAD CLAIMED THAT THE ORDER OF WITHDRAWAL OF AAR WAS DESPATCHED TO CIT(IT) - II, MUMBAI, ON 20/02/2015, HOWEVER, WE FIND THAT AS OBSERVED BY THE DRP, A PERUSAL OF THE CASE RECORDS OF THE A.O DID NOT REVEAL THAT ANY SUCH ORDER DATED 17/02/2015 STATED TO HAVE BEEN DESPATCHED BY THE AAR TO THE CIT(IT) - II, MUMBAI, WAS AVAILABLE ON RECORD. IN OUR CON SIDERED VIEW, THOUGH IT IS THE CLAIM OF THE LD. A.R THAT THE AAR ORDER OF WITHDRAWAL, DATED 17/02/2015 WAS DESPATCHED TO CIT(IT) - II, MUMBAI ON P A G E | 11 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 20/02/2015, HOWEVER, THERE IS NO MATERIAL AVAILABLE ON RECORD WHICH WOULD EVIDENCE THAT THE AFORESAID ORDER OF AA R WAS RECEIVED BY THE CIT(IT) - II, MU MBAI. ALSO, THE LD. A.R HAD FAILED TO LEAD ANY EVIDENCE TO PROVE ITS CLAIM THAT THE ORDER OF THE AAR, DATED 17.02.2015 WAS EVER SERVED UPON THE CIT(IT) - II, MUMBAI. AS IS DISCERNIBLE FROM THE ORDER OF THE DRP, A LETTER DA TED 29/08/2016 COMMUNICATING THE ORDER OF AAR TO THE CIT(IT) - 4, MUMBAI, THAT WAS RECEIVED ON 30/08/2016 WAS FOUND AVAILABLE ON RECORD. IN THE BACKDROP OF THE AFORESAID FACTS WHICH HAD NOT BEEN DISLODGED BY THE LD. A.R BEFORE US, WE ARE OF THE CONSIDERED VI EW THAT AS THE ORDER OF WITHDRAWAL OF THE AAR WAS RECEIVED BY THE REVENUE ONLY AS ON 30/08/2016, THEREFORE, THE DRAFT ASSESSMENT ORDER PASSED BY THE A.O UNDER SEC. 144C(1) R.W.S 143(3), DATED 26/10/2016, WAS PASSED WELL WITH IN THE STIPULATED TIME LIMIT ENVISAGED IN CLAUSE (VI II ) OF THE EXPLANATION 1 TO SEC. 153 OF THE ACT. WE SHALL NOW ADVERT TO THE ALTERNATIVE CLAIM OF THE LD. A.R , THAT AS THE COUNSEL FOR THE REVENUE WAS PRESENT AT THE TIME OF PRONOUNCEMENT OF THE ORDER BY THE AAR ON 17/02/2015, THEREFORE, IT COULD BE SAFELY BE CONCLUDED THAT THE REVENUE WAS AWARE OF THE SAID ORDER OF WITHDRAWAL OF THE AAR. WE FIND THAT THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION HAD RELIED ON THE ORDER OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT - 7 VS. ODEON BUILDES PVT. LTD. (2017) 393 ITR 0027 (DELHI) (FB) . IN OUR CONSIDERED VIEW, THE LD. A.R HAD ON THE BASIS OF INCOMPLETE FACTS RAISED THE AFORESAID CLAIM. ON A PERUSAL OF THE ORDER OF THE HONBLE HIGH COURT WHICH WAS DELIVER ED IN CONTEXT OF FILING OF AN APPEAL U/S 260A, IT WAS OBSERVED , THAT THOUGH THE DATE OF PRONOUNCEMENT OF THE ORDER CAN SAFELY BE TAKEN AS THE DATE ON WHICH THE REVENUE WAS AWARE OF THE ORDER, BUT THEN FOR THE PURPOSE OF COMMENCEMENT OF LIMITATION THE TIME TAKEN BY THE COUNSEL FOR THE REVENUE TO OBTAIN A COPY OF T H E ORDER WILL HAVE TO BE EXCLUDED. IN THE CASE BEFORE US, THE LD. A.R HAD FAILED TO LEAD NECESSARY MATERIAL AS REGARDS THE DATE ON WHICH THE COUNSEL FOR THE REVENUE/D.R HAD OBTAINED THE COPY OF THE ORDER OF THE AAR. AS SUCH, THE AFORESAID CLAIM OF THE LD. A.R ALSO HAS TO FAIL IN THE ABSENCE OF COMPLETE FACTS. ON THE BASIS OF OUR AFORESAID DELIBERATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE CLAIM OF THE LD. A.R THAT THE DRAFT ASSESSMENT ORDER PASSED BY THE A.O UNDER SEC. 144C(1) R.W.S 143(3), DATED 26/10/2016 WAS BEYOND THE STIPULATED PRESCRIBED TIME LIMIT ENVISAGED IN CLAUSE (VI) OF EXPLANATION 1 TO SEC. 153 OF THE ACT, DOES NOT MERIT ACCEPTANCE AND IS LIABLE TO BE REJECTED. GROUND OF APPEAL NO. 3 IS DISMISSED. P A G E | 12 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 11. WE SHALL NOW ADVERT TO THE CONTENTIONS ADVANCED BY THE LD. A.R AS REGARDS THE MERITS OF THE CASE. AS OBSERVED BY US HEREINABOVE, THE ASSESSEE WHICH IS A FOREIGN COMPANY INCORPORATED IN FINLAND IS ENGAGED IN THE BUSINESS OF DEVELOPING A ND MARKETING SPECIALIZED OFF - THE - SHELF SOFTWARE PRODUCTS WHICH ARE USED IN INDUSTRIES LIKE BUILDING AND CONSTRUCTION, ENERGY DISTRIBUTION AND INFRASTRUCTURE MANAGEMENT. T HE ASSESSEE DURING THE YEAR HAD RECEIVED THE FOLLOWING PAYMENTS FROM ITS NON - EXCLUSIVE RESELLERS/DISTRIBUTORS FOR THE INDIAN TERRITORY VIZ. (I). M/S TRIMBLE SOLUTIONS INDIA PRIVATE LIMITED (EARLIER KNOWN AS TEKLA INDIA PVT. LTD.); AND (II). M/S DOWCOMAX SERVICES INDIA LIMITED : SR. NO. PARTICULARS AMOUNT 1. PAYMENT RECEIVED FOR SALE OF OFF - THE SHELF SOFTWARE RS. 7,81,72,583/ - 2. PAYMENT RECEIVED FOR MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) RS. 2,22,46,237/ - 3. PAYMENT RECEIVED FOR MANAGEMENT FEES RS. 31,86,724/ - TOTAL RS. 10,36,05,544/ - OBSERVING, THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS FOR SALE OF SPECIALIZED SOFTWARE AND MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) WERE IN THE NATURE OF ROYALTY AS PER ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, AND ALSO AS PER THE EXPLANATION 2 TO SEC. 9(1)(VI) OF THE ACT, THE A.O/DRP HAD INCLUDED THE SAME IN THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 12. ON A PERUSAL OF ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, WE FIND , THAT THE DEFINITION OF THE TERM ROYALTY THEREIN ENVISAGE PAYMENTS RECEIVED AS A CONSIDERATION FOR THE USE OF , OR THE RIGHT TO USE CERTAIN SPECIFIC WORKS WHICH COULD INCLUDE INTELLECTUAL PROPERTIES (SUCH AS COPYRIGHT, PATENTS ETC.) BY THE OWNER OF SUCH INTELLECTUAL PROPERTIES FROM ANY OTHER PERSON. FOR THE SAKE OF CLARITY, ARTICLE 1 2 OF THE INDIA - FINLAND TAX TREATY IS REPRODUCED AS UNDER : ARTICLE 12 ROYALTIES AND FEES F OR TECHNICAL SERVICES 1. ROYALTIES OR FEES FOR TECHNICAL SERVICES ARISING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTHER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. P A G E | 13 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 2. HOWEVER, SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE AND ACCORDING TO THE LAWS OF THAT STATE, BUT IF THE BENEFICIAL OWNER OF THE ROYALTIES IS A RESIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL NOT EXCE ED 10 PER CENT OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES. 3. (A) THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, A RTISTIC OR SCIENTIFIC WORK INCLUDING CINEMATOGRAPH FILMS, AND FILMS OR TAPES FOR TELEVISION OR RADIO BROADCASTING, ANY PATENT, TRADE - MARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR THE USE OF, OR THE RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR S CIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE, (B) THE TERM 'FEES FOR TECHNICAL SERVICES' AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY KIND, OTHER THAN T HOSE MENTIONED IN ARTICLES 14 AND 15 OF THIS AGR EEMENT AS CONSIDERATION FOR MANAGERIAL OR TECHNICAL OR CONSULTANCY SERVICES, INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL. 4. THE PROVISIONS OF PARAGRAPHS 1 AND 2 SHALL NOT APPLY IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR T ECHNICAL SERVICES, BEING A RESIDENT OF A CONTRACTING STATE, CARRIES ON BUSINESS IN THE OTHER CONTRACTING STATE IN WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARISE, THROUGH A PERMANENT ESTABLISHMENT SITUATED THEREIN, OR PERFORMS IN THAT OTHER STATE INDEPENDENT PERSONAL SERVICES FROM A FIXED BASE SITUATED THEREIN, AND THE RIGHT OR PROPERTY IN RESPECT OF WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE PAID IS EFFECTIVELY CONNECTED WITH SUCH PERMANENT ESTABLISHMENT OR FIXED BASE. IN SUCH CASE THE PROVISIONS OF ARTICLE 7 OR ARTICLE 14, AS THE CASE MAY BE, SHALL APPLY. 5. ROYALTIES OR FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARISE IN A CONTRACTING STATE WHEN THE PAYER IS THAT STATE ITSELF, A POLITICAL SUB - DIVISION, A LOCAL AUTHORITY, OR A RESI DENT OF THAT STATE. WHERE, HOWEVER, THE RIGHT OR PROPERTY FOR WHICH THE ROYALTIES ARE PAID IS USED WITHIN A CONTRACTING STATE OR THE FEES FOR TECHNICAL SERVICES RELATE TO SERVICES PERFORMED, WITHIN A CONTRACTING STATE, THEN SUCH ROYALTIES OR FEES FOR TECHN ICAL SERVICES SHALL BE DEEMED TO ARISE IN THE STATE IN WHICH THE RIGHT OR PROPERTY IS USED OR THE SERVICES ARE PERFORMED. WHERE, HOWEVER, THE PERSON PAYING THE ROYALTIES OR FEES FOR TECHNICAL SERVICES, WHETHER HE IS A RESIDENT OF A CONTRACTING STATE OR NOT , HAS IN A CONTRACTING STATE A PERMANENT ESTABLISHMENT OR A FIXED BASE IN CONNECTION WITH WHICH THE LIABILITY TO PAY THE ROYALTIES OR FEES FOR TECHNICAL SERVICES WAS INCURRED, AND SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE BORNE BY SUCH PERMANENT ES TABLISHMENT OR FIXED BASE, THEN SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARISE IN THE STATE IN WHICH THE PERMANENT ESTABLISHMENT OR FIXED BASE IS SITUATED. 6. WHERE, BY REASON OF A SPECIAL RELATIONSHIP BETWEEN THE PAYER AND THE BENE FICIAL OWNER OR BETWEEN BOTH OF THEM AND SOME OTHER PERSON, THE AMOUNT OF THE ROYALTIES, HAVING REGARD TO THE USE, RIGHT OR INFORMATION FOR WHICH THEY ARE PAID, EXCEEDS THE AMOUNT WHICH WOULD HAVE BEEN AGREED UPON BY THE PAYER AND THE BENEFICIAL OWNER IN T HE ABSENCE OF SUCH RELATIONSHIP, THE PROVISIONS OF THIS ARTICLE SHALL APPLY ONLY TO THE LAST - MENTIONED AMOUNT. IN SUCH CASE, THE EXCESS PART OF THE PAYMENTS SHALL REMAIN TAXABLE ACCORDING TO THE LAWS OF EACH CONTRACTING STATE, DUE REGARD BEING HAD TO THE O THER PROVISIONS OF THIS AGREEMENT . 13. AS IS DISCERNIBLE FROM THE RECORDS, WE FIND, THAT THE ASSESSEE COMPANY AS PER THE TERMS AND CONDITIONS OF ITS RESPECTIVE AGREEMENTS W ITH ITS NON - EXCLUSIVE RESELLERS/DISTRIBUTORS FOR THE INDIAN TERRITORY, VIZ. (I). M/S TRIMBLE SOLUTIONS INDIA PRIVATE LIMITED, WOS OF THE ASSESSEE COMPANY; AND (II). M/S DOWCOMAX SERVICES INDIA LIMITED, HAD MERELY GRANTED TO THE SAID DISTRIBUTORS THE RIGHT TO DISTRIBUTE THE COPYRIGHTED ARTICLE (I.E SOFTWARE PROD UCTS) AND NOT THE P A G E | 14 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) COPYRIG HT IN THE SAID ARTICLE. IN FACT, WE FIND THAT THE ASSESSEE EXCLUSIVELY OWNED ALL THE INTELLECTUAL PROPERTY RIGHTS (IPR S ) IN RELATION TO THE SOFTWARE , VIZ. TRIMBLE SO F TWARE. AS PER THE RESPECTIVE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH ITS RESELLE RS/DISTRIBUTORS, WE FIND, T HAT THE DISTRIBUTORS DID NOT USE OR HAD ANY RIGHT TO USE THE COPYRIGHT IN THE SOFTWARE PROGRAMME. IN OUR CONSIDER E D VIEW AS THE SOFTWARE PROVIDED BY THE ASSESSEE TO ITS RESELLERS/DISTRIBUTORS WAS ONLY FOR THE PURPOSE OF RESALE/DI STRIBUTION TO THE END USER CUSTOMER FOR USE AS A COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCT) WITH NO RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SOFTWARE, THEREFORE, IT CAN SAFELY OR RATHER INESCAPABLY BE CONCLUDED THAT THE PAYMENTS RECEIVED BY THE ASSESSE E FROM ITS DISTRIBUTORS WERE IN THE NATURE OF SALES REVENUE AND NOT ROYALTY. ON A PERUSAL OF THE RESPECTIVE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH ITS RESELLERS/DISTRIBUTORS THE RIGHTS WHICH WERE VESTED WITH THEM CAN BRIEFLY BE CULLED OUT AS UNDER : THE DISTRIBUTORS WERE GRANTED A NON - EXCLUSIVE LICENSE TO MARKET AND DISTRIBUTE THE SOFTWARE PRODUCTS DEVELOPED BY THE ASSESSEE COMPANY ; THE DISTRIBUTORS DID NOT HAVE A RIGHT TO THE SOURCE CODE OF SUCH SOFTWARE PRODUCTS; THE DISTRIBUTORS WERE NO T PERMITTED TO MODIFY, TRANSLATE OR RECOMPILE, ADD TO OR IN ANY WAY ALTER THE SOFTWARE PRODUCTS INCLUDING ITS DOCUMENTATION; THE DISTRIBUTORS WERE NOT PERMITTED TO CREATE THE SOURCE CODE OF THE SOFTWARE PRODUCTS SUPPLIED UNDER THE AGREEMENTS; THE DISTRIBUTORS WERE NOT EXPRESSLY PERMITTED TO REPRODUCE OR MAKE COPIES OF THE SOFTWARE PRODUCTS UNDER THE AGREEMENTS (EXCEPT A BACKUP COPY AS REQUIRED BY THE CUSTOMER); THE DISTRIBUTORS WERE NOT VESTED WITH ANY RIGHT OF ANY NATURE IN THE INTELLECTUAL PROPER TY DEVELOPED AND OWNED BY THE ASSESSEE COMPANY IN THE SOFTWARE PRODUCTS; THAT ALL THE TR A DEMARKS AND TRADE NAMES WHICH THE DISTRIBUTORS USED IN CONNECTION WITH THE PRODUCTS SUPPLIED, REMAINED THE EXCLUSIVE PROPERTY OF THE ASSESSEE COMPANY WHICH AT ALL TIM ES HAD THE TITLE TO ALL RIGHTS TO INTELLECTUAL PROPERTY, SOFTWARE AND PROPRIETARY INFORMATION INCLUDING ALL COMPONENTS, ADDITIONS, MODIFICATIONS AND UPDATES; AND P A G E | 15 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) THE DISTRIBUTORS DID NOT HAVE ANY AUTHORITY TO NEGOTIATE OR TO CONCLUDE CONTRACTS ON BEHALF O F THE ASSESSEE COMPANY, ACT AS ITS AGENT OR IN ANY WAY REPRESENT THE ASSESSEE SO AS TO BIND IT UNDER ANY TRANSACTION. AS IS BORNE FROM THE RECORDS, THE SOFTWARE PROVIDED BY THE ASSESSEE TO ITS DISTRIBUTORS WAS FOR THE PURPOSE OF RESALE/DISTRIBUTION TO THE END USER CUSTOMERS AND THERE WAS NO RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SAID COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCTS) . IN OUR CONSIDERED VIEW, AS THE ASSESSEE HAD ONLY GRANTED THE RIGHT TO DISTRIBUTE THE SOFTWARE PRODUCTS AND NOT ANY RIGHT T O REPRODUCE OR MAKE COPIES OF THE SOFTWARE PRODUCT, THEREFORE, IN THE ABSENCE OF VESTING OF ANY RIGHT OF COMMERCIAL EXPLOITATION OF THE INTELLECTUAL PROPERTY CONTAINED IN THE COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCTS) WITH THE TRANSFEREE, THE AMOUNTS RECE IVED BY THE ASSESSEE FROM ITS DISTRIBUTORS WAS CLEARLY IN THE NATURE OF SALES REVENUE AND COULD NOT BE HELD AS ROYALTY IN ITS HANDS. IN SUM AND SUBSTANCE, WE FIND THAT AS THE RIGHT ACQUIRED BY THE TRANSFEREE FROM THE SALE OF THE SOFTWARE WAS TO USE THE COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCTS) AND NOT THE RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SOFTWARE, THEREFORE, THE PAYMENTS RECEIVED BY THE ASSESEE FROM ITS DISTRIBUTORS COULD NOT BE STAMPED AS ROYALTY IN THE HANDS OF THE ASSESSEE. WE ALSO FIN D SUBSTANCE IN THE CLAIM OF THE LD. A.R THAT AS PER THE COPYRIGHT ACT, A TRANSFER OF THE COPYRIGHTED ARTICLE (I.E THE SOFTWARE PRODUCT) WHICH IS THE SUBJECT OF COPYRIGHT WOULD NOT NECESSARILY INVOLVE A TRANSFER OF THE COPYRIGHT. AS CAN BE GATHERED FROM A P ERUSAL OF THE AGREEMENTS BETWEEN THE ASSESSEE AND ITS DISTRIBUTORS, THE RIGHTS ACQUIRED BY THE TRANSFEREE ON THE SALE OF THE COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCTS) IS TO USE THE COPYRIGHTED ARTICLE AND NOT T HE RIGHT TO USE THE COPYRIGHT EMBEDDED IN THE SOFTWARE. ON THE BASIS OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT AS THE SALE OF THE COPYRIGHTED ARTICLE (I .E SOFTWARE PRODUCTS) BY THE AS SESSEE COMPANY CANNOT BE REGARDED AS A SALE OF COPYRIGHT IN THE SOFTWARE, THEREFORE, THE PA YMENTS RECEIVED BY THE ASSESSEE ON SUCH SALE OF SOFTWARE WOULD BE ITS BUSINESS INCOME AND CANNOT BE REGARDED AS ROYALTY INCOME UNDER THE PROVISIONS OF INDIA - FINLAND TAX TREATY. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENTS OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF DIT VS. INFRASOFT LTD. (2014) 264 CTR 329 (DEL). IN THE SAID JUDGMENT THE HONBLE HIGH COURT HAD OBSERVED THAT THE C ONSIDERATION RECEIVED BY THE ASSESSEE ON GRANT OF LICENCES FOR USE OF SOFTWARE IS NOT TAXABLE AS ROYALTY WITHIN THE MEANING OF ARTICLE 12(3) OF P A G E | 16 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) THE DTAA BETWEEN INDIA AND THE U SA. ALSO, THE I T AT, MUMBAI L BENCH IN DDIT VS. RELIANCE C OMMUNICATIONS LTD. (2018) 52 CCH 292 (MUM) HAD IN ITS RECENT ORDER HELD, THAT AS THE PAYMENT MADE BY THE ASSESSEE WAS FOR COPYRIGHTE D ARTICLE I.E SOFTWARE AND THERE WAS NO TRANSFER OF COPYRIGHT OF THE SOFTWARE IN ANY MANNER, THUS THE SAME DID NOT AMOUNT TO ROYALTY WITHIN THE DEFINITION OF ARTICLE 12/13(3) OF THE RESPECTIVE TAX TREATIES AND RESULTANTLY THE ASSESSEE REMAINED UNDER NO O BLIGATION TO DEDUCT TAX AT SOURCE WHILE MAKING THE REMITTANCES . 1 4 . WE SHALL NOW ADVERT TO THE OBSERVATIONS OF THE A.O/DRP , WHEREIN THEY HAD THROUGH ARTICLE 3(2) OF THE INDIA - FINLAND TAX TREATY TRIED TO READ THE EXPLANATION 4, EXPLANATION 5 AND EXPLANATION 6 TO SEC. 9(1)(V I) AS HAD BEEN MADE AVAILABLE IN THE INCOME - TAX ACT, 1961 BY THE LEGISLATURE VIDE THE FINANCE ACT, 2012 W.R.E.F 01/04/1976, INTO THE DEFINITION OF ROYALTY CONTEMPLATED IN ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY. WE ARE UN ABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE AFORESAID VIEW OF THE LOWER AUTHORITIES. ARTICLE 3(2) OF THE INDIA - FINLAND TAX TREATY PROVIDES THAT AS REGARDS THE APPLICATION OF THE AGREEMENT AT ANY TIME BY A CONTRACTING STATE ANY TERM NOT DEFINED THEREIN S HALL, UNLESS THE CONTEXT OTHERWISE REQUIRES, HAVE THE MEANING THAT IT HAS AT THAT TIME UNDER THE LAW OF THAT STATE FOR THE PURPOSES OF THE TAXES TO WHICH THE AGREEMENT APPLIES . AS SUCH, IF A PARTICULAR TERM HAS BEEN SPECIFICALLY DEFINED IN THE TAX TREATY, THEN THE AMENDMENT TO THE DEFINITION OF SUCH TERM UNDER THE ACT WOULD HAVE NO BEARING ON THE DEFINITION OF SUCH TERM IN THE CONTEXT OF THE CONVENTION, UNLESS THE TAX TREATY IS ALSO CORRESPONDINGLY AMENDED. IN OUR CONSIDERED VIEW, A COUNTRY WHICH IS A PARTY TO THE TAX TREATY CANNOT UNILATERALLY ALTER ITS PROVISIONS. IN FACT, AN AMENDMENT TO THE PROVISION OF THE TREATY CAN BE MADE BILATERALLY AFTER ENTERTAINING DELIBERATIONS FROM BOTH THE COUNTRIES WHO SIGNED IT. ACCORDINGLY, IF THERE IS NO AMENDMENT TO THE P ROVISIONS OF THE TAX TREATY BUT THERE IS SOME AMENDMENT ADVERSE TO THE ASSESSEE IN THE ACT, WHICH PROVISION HAS BEEN SPECIFICALLY DEFINED IN THE TAX TREATY OR THERE IS NO REFERENCE IN THE TAX TREATY TO THE ADOPTION OF SUCH PROVISION FROM THE ACT, THEN SUCH AMENDMENT WILL HAVE NO EFFECT ON THE TAX TREATY. ON A PERUSAL OF THE INDIA - FINLAND TAX TREATY, WE FIND, THAT THE TERM ROYALTY HAS BEEN DEFINED IN ARTICLE 12(3)(A). SUCH DEFINITION OF THE TERM ROYALTY AS PER THE SAID ARTICLE IS EXHAUSTIVE. WE FIND THAT PURSUANT TO THE INSERTION OF EXPLANATION 4, EXPLANATION 5 AND EXPLANATION 6 BY THE FINANCE ACT, 2012 W.R.E.F 01/04/1976, NO CORRESPONDING AMENDMENT HAS BEEN MADE IN THE INDIA - FINLAND TAX TREATY TO P A G E | 17 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) BRING THE DEFINITION OF ROYALTY THEREIN ENVISAGED AT PAR WITH THAT PROVIDED UNDER SEC. 9(1)(VI) OF THE ACT. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THE RETROSPECTIVE INSERTION OF EXPLANATION 4, EXPLANATION 5 AND EXPLANATION 6 TO SEC. 9(1)(VI) OF THE ACT AS HAD BEEN MADE AVAILABLE ON THE STATUTE BY THE FINANCE ACT, 2012 W.R.E.F 01/06/ 1976 CANNOT BE READ INTO THE INDIA - FINLAND TAX TREATY. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF DELHI IN DIT VS. NEW SKIES SATELLITE BV (2016) 3 82 ITR 114 (DEL) . IN THE SAID CASE IT W AS OBSERVED BY THE HONBLE HIGH COURT THAT NO AMENDMENT TO THE ACT, WHETHER RETROSPECTIVE OR PROSPECTIVE CAN BE READ IN A MANNER SO AS TO EXTEND ITS OPERATION TO THE TERMS OF AN INTERNATIONAL TREATY. FURTHER, IT WAS OBSERVED THAT CLARIFICATORY OR DECLARATO RY AMENDMENT, MUCH LESS ONE WHICH MAY SEEK TO OVERCOME AN UNWELCOME JUDICIAL INTERPRETATION OF LAW, CANNOT BE ALLOWED TO HAVE THE SAME RETROACTIVE EFFECT ON AN INTERNATIONAL INSTRUMENT EFFECTED BETWEEN TWO SOVEREIGN STATES PRIOR TO SUCH AMENDMENT. A LSO, SI MILAR VIEW HAD BEEN TAKEN BY A COORDINATE BENCH OF THE ITAT MUMBAI I BENCH, MUMBAI IN THE ACIT (IT) - 4(1)(1), MUMBAI V S. RELIANCE JIO INFOCOMM LTD. [ITA NO. 6331 TO 6334/MUM/2018, DATED 15/11/2019] AND THE ITAT DELHI BENCH B IN DATAMINE INTERNATIONAL LTD. VS. ADDL. DIT, RANGE 1, INTERNATIONAL TAXATION, NEW DELHI [2016] 158 ITD 84 (DELHI) . IN THE BACKDROP OF OUR AFORESAID DELIBERATIONS, WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW TAKEN BY THE LOWER AUTHORITIES THAT EXPL ANATION 4, EXPLANATION 5 AND EXPLANATION 6 TO SEC. 9(1)(VI) AS HAD BEEN MADE AVAILABLE IN THE INCOME - TAX ACT, 1961 BY THE LEGISLATURE VIDE THE FINANCE ACT, 2012 W.R.E.F 01/06 /1976, ARE TO BE READ INTO THE DEFINITION OF ROYALTY AS ENVISAGED IN ARTICL E 12 OF THE INDIA - FINLAND TAX TREATY. 1 5 . AS OBSERVED BY US HEREINABOVE, THE ASSESSEE IN ADDITION TO DISTRIBUTION OF SOFTWARE PRODUCTS IN INDIA HAD ALSO PROVIDED SOFTWARE UPGRADES, MAINTENANCE AND SU PPORT SERVICES WITH REGARD TO ITS SOFTWARE TO THE DISTRIBUTORS, WHO IN TURN PROVIDED THE SAME TO THE END USER CUSTOMERS WHO HAD ENTERED INTO A MAINTENANCE AGREEMENT WITH THE DISTRIBUTORS. THE ASSESSEE DURING THE YEAR HAD RECEIVED AN AMOUNT OF RS. 2,22,46,237/ - FROM ITS DISTRIBUTORS TOWARD S MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES). ON A PERUSAL OF THE RECORDS, WE FIND, THAT THE ASSESSEE WOULD GRANT TO ITS DISTRIBUTORS A RIGHT OF NEW OFFICIAL SUB - RELEASE I.E A MODIFICATION TO A LICENSED SOFTWARE PRODUCT WHICH WOULD INCORPORATE T HE CORRECTNESS AND P A G E | 18 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) PROVIDE A FUNCTIONAL OR PERFORMANCE IMPROVEMENT. ALSO, THE ASSESSEE WOULD GRANT TO ITS DISTRIBUTORS A RIGHT OF NEW OFFICIAL MAIN RELEASE I.E AN UPDATE TO THE EXISTING SOFTWARE PRODUCT WITH ENHANCED FEATURES, WHICH THE CUSTOMERS WOULD PRE FER INSTEAD OF BUYING NEW LICENSED SOFTWARE. ACCORDINGLY, THE END USER CUSTOMERS BY ENTERING INTO A MAINTENANCE AGREEMENT COULD ACCESS AND DOWNLOAD THE UPDATES OFFERED BY THE ASSESSEE. AS THE PAYMENTS RECEIVED BY THE ASSESSEE TOWARDS DISTRIBUTION OF SUB - RE LEASES AND MAIN RELEASES WERE ALSO FOR A RIGHT TO PROVIDE A COPYRIGHTED ARTICLE I.E SOFTWARE UPDATES , WHICH WAS AKIN TO THE AMOUNTS RECEIVED FOR DISTRIBUTION OF THE SPECIALIZED OFF - THE - SHELF SOFTWARE PRODUCTS, AND NOT FOR ANY RIGHT TO USE THE COPYRIGHT EMB EDDED IN THE SAID COPYRIGHTED ARTICLE (I.E SOFTWARE PRODUCTS), THEREFORE, THE SAME TOO IN OUR CONSIDERED VIEW CANNOT BE CONSTRUED AS R OYALTY INCOME, AND WOULD BE THE BUSINESS INCOME OF THE ASSESSEE . ON A SIMILAR FOOTING, WE FIND, THAT AS PER THE DISTR IBUTORS AGREEMENTS, IT WAS THE RESPONSIBILITY OF THE DISTRIBUTORS TO RESOLVE THE END USER CUSTOMERS QUERIES. IN CASE, THE DISTRIBUTORS WOULD REQUIRE ASSISTANCE ON ISSUES AS REGARDS FUNCTIONALITIES, TROUBLE SHOOTING AND VERIFYING ERROR SITUATIONS, THE ASSES SEE WOULD PROVIDE THE SAME. THE AFORESAID QUERIES WOULD BE RESOLVED VIA E - MAILS OR TELEPHONE CALLS BY THE EMPLOYEES OF THE ASSESSEE BASED IN FINLAND. IN OUR CONSIDERED VIEW, AS THE PAYMENTS RECEIVED BY THE ASSESSEE FROM RENDERING OF THE MAINTENANCE AND SUP PORT SERVICES DOES NOT FALL WITHIN THE SCOPE AND GAMUT OF THE DEFINITION OF ROYALTY IN ARTICLE 12 OF THE INDIA - FINLAND TAX TREATY, THEREFORE, THE PAYMENTS RECEIVED BY THE ASSESSEE FOR PROVIDING SUCH SUPPORT SERVICES CANNOT BE HELD AS ROYALTY IN THE HAN DS OF THE ASSESSEE. 1 6 . I N TERMS OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM ITS DISTRIBUTORS FOR SALE OF SPECIALIZED SOFTWARE AND MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) CANNOT BE HELD AS BEING IN THE NATURE OF ROYALTY AS PER ARTICLE 12 OF THE INDIA - FI NLAND TAX TREATY. GROUNDS OF APPEAL NOS. 4 TO 7 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 1 7 . GROUND OF APPEAL NO. 1 BEING GENERAL IS DISMISSED AS NOT PRESSED. 1 8 . THE A SSESSEE HAS ASSAILED THE PERIOD OF LEVY OF INTEREST U/S 234A. ALSO, THE L EVY OF INTEREST U/S 234B HAS BEEN CHALLENGED. AS THE CALCU LATION OF THE INTEREST LIABILITIES WOULD BE CONSEQUENTIAL TO THE DETERMINING OF THE TAX LIABILITY OF THE ASSE S SEE , IF ANY, THEREFORE, THE SAME P A G E | 19 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) IS BEING RESTORED TO THE FILE OF THE A.O. GROUNDS OF APPEAL NOS. 8 & 9 ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS. 1 9 . THE ASSESSEE HAS ASSAILED THE INITIATION OF THE PENALTY PROCEEDINGS U/S 271(1)(C), VIDE GROUND OF APPEAL NO. 10. AS THE SAID GRIEVANCE OF THE ASSESSEE IS PREMATURE, THEREFORE T HE SAME IS DISMISSED. GROUND OF APPEAL NO. 10 IS DISMISSED. 20 . THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NO. 6482/MUM/2012 A.Y 2011 - 12 21 . WE SHALL NOW ADVERT TO THE APPEAL OF THE ASSESSEE FOR A.Y 2011 - 12. THE ASSESEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US : BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TRIMBLE SOLUTIONS CORPORATION (HEREINAFTER R EFERRED TO AS THE' APPELLANT' OR 'TRIMBLE CORPORATION') RESPECTFULLY CRAVES TO PREFER AN APPEAL AGAINST THE ORDER PASSED UNDER SECTION 144C(13) READ WITH SECTION 143(3) OF THE INCOME - TAX ACT, 1961 ('THE ACT') BY THE DEPUTY COMMISSIONER OF INCOME - TAX (INTER NATIONAL TAXATION) - 4(1)(2), MUMBAI (HEREINAFTER REFERRED TO AS THE 'AO') DATED 31 AUGUST 2017 (RECEIVED ON 8 SEPTEMBER 2017) IN PURSUANCE OF THE DIRECTIONS ISSUED BY THE HON'BLE DISPUTE RESOLUTION PANEL - 2, MUMBAI (HEREINAFTER REFERRED TO AS THE 'DRP' ) ON THE FOLLOWING GROUNDS: GENERAL GROUND 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AA HAS ERRED IN DETERMINING THE TOTAL TAXABLE INCOME OF THE APPELLANT FOR THE SUBJECT AY AT RS 15,95,09,620/ - AS AGAINST 'NIL' INCOME REPORTED IN THE RETURN OF INCOME FILED BY THE APPELLANT FOR THE SUBJECT AY; TIME - BARRING ASSESSMENT PROCEEDINGS 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN PASSING ORDER UNDER SECTION 143(3) OF THE ACT BEYOND THE TIME LIMIT FOR COMPLETIO N OF SUCH PROCEEDINGS AS PER THE PROVISIONS OF CLAUSE (VIII) OF EXPLANATION 1 OF SECTION 153 OF THE ACT; TAXABILITY OF RECEIPT FROM SALE OF 'OFF - THE SHELF' SOFTWARE AMOUNTING TO RS 9,31,88,908/ - AS 'ROYALTY' 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AT) HAS ERRED IN HOLDING THAT PAYMENTS OF RS 9,31,88,908/ - RECEIVED BY THE APPELLANT TOWARDS SALE OF 'OFF - THE SHELF SOFTWARE ARE IN THE NATURE OF 'ROYALTY' AS PER THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT; 4 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AA HAS ERRED IN HOLDING THAT PAYMENTS OF RS 9,31,88,908/ - RECEIVED BY THE APPELLANT TOWARDS SALE OF 'OFF - THE SHELF SOFTWARE ARE IN THE NATURE OF 'ROYALTY' UNDER ARTICLE 13 OF THE INDIA - FINLAND TAX TREATY; P A G E | 20 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) TAXABILITY OF RECEIPT FROM MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) AMOUNTING TO RS 6,63,20,7 12/ - AS 'ROYALTY ' 5 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN HOLDING THAT PAYMENTS OF RS 6,63,20,712/ - RECEIVED BY THE APPELLANT TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) ARE IN THE NATURE OF 'ROYALTY' AS PER THE PROVISIONS OF SECTION 9(L)(VI) OF THE ACT; 6 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN HOLDING THAT PAYMENTS OF RS 6,63,20,712/ - RECEIVED BY THE APPELLANT TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPG RADES) ARE IN THE NATURE OF 'ROYALTY' UNDER ARTICLE 13 OF THE INDIA - FINLAND TAX TREATY; INTEREST UNDER SECTION 234A OF THE ACT 7 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234A OF THE ACT . INTEREST UNDER SECTION 234B OF THE ACT 8 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN UPHOLDING THE LEVY OF NTEREST UNDER SECTION 234B OF THE ACT; AND PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT 9 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 27I(L)(C) OF THE ACT. THE APPELLANT RESPECTFULLY SUBMITS THAT THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EA CH OTHER. THE APPELLANT FURTHER PRAYS THAT ANY OTHER RELIEF AS THE HON'BLE ITAT MAY DEEM FIT BE GRANTED. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, OMIT OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT THE TIME OF THE APPEAL, TO ENABLE THE HON'BLE ITAT TO DECIDE THE APPEAL ACCORDING TO LAW. 22 . BRIEFLY STATED, THE ASSESSEE COMPANY HAD FILED ITS R ETURN OF INCOME FOR A.Y 2011 - 12 ON 28.03.2013 , DECLARING ITS TOTAL INCOME AT RS. NIL. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 23 . DURING THE COURSE OF T HE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE IN ORDER TO FACILITATE DISTRIBUTION OF ITS SOFTWARE IN INDIA HAD APPOINTED ITS WHOLLY OWNED SUBSIDIARY COMPANY VIZ. M/S TRIMBLE SOLUTIONS INDIA PRIVATE LIMITED (EARLIER KNOWN AS TEKLA I NDIA PVT. LTD.), VIDE AN AGREEMENT DATED 28.01.2008 AND M/S DOWCOMAX SERVICES INDIA LIMITED, VIDE AGREEMENT DATED 23.06.2008, AS ITS NON - EXCLUSIVE RESELLERS/DISTRIBUTORS FOR THE INDIAN TERRITORY. ON A PERUSAL OF THE RECORDS, IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD DURING THE YEAR RECEIVED THE FOLLOWING PAYMENTS FROM ITS DISTRIBUTORS : P A G E | 21 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) SR. NO. PARTICULARS AMOUNT 1. PAYMENT RECEIVED FOR SALE OF OFF - THE SHELF SOFTWARE RS. 9,31,88,908/ - 2. PAYMENT RECEIVED FOR MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) RS. 6,63,20,712/ - 3. PAYMENT RECEIVED FOR MANAGEMENT FEES RS. 69,62,683/ - - TOTAL RS. 16,64,72,303/ - 24 . AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES, THE ASSESSEE HAD FILED AN APPLICATION DATED 19/10/2012 UNDER SEC. 245Q(1) OF THE ACT BEFORE THE AUTHORITY OF ADVANCE RULING (FOR SHORT AAR) FOR SEEKING AN ADVANCE RULING ON TAXABILITY OF SOFTWARE PAYMENTS RECEIVED BY IT FROM INDIA, WHICH APPLICATION WAS HOWEVER SUBSE QUENTLY WITHDRAWN BY IT. IT WAS INFORMED BY THE ASSESSEE THAT THE ORDER OF WITHDRAWAL OF AAR WAS PASSED ON 17/02/2015. ALSO, IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE ORDER OF WITHDRAWAL OF AAR WAS RECEIVED BY THE CIT(IT) - II, MUMBAI ON 24/02/2015, THERE FORE, THE DRAFT ASSESSMENT ORDER U/S 144C(1) R.W.S 143(3) AS PER CLAUSE (VI II ) OF EXPLANATION 1 TO SEC. 153 COULD HAVE BEEN PASSED LATEST BY 30/08/2016. HOWEVER, AS THE O RDER OF THE AAR ALLOWING THE WITHDRAWAL OF APPLICATION BY THE ASSESSEE WAS RECEIVED BY THE CIT(IT) - 4, MUMBAI ON 29/08/2016 , THEREFORE THE A.O OBSERVING THAT THE ASSESSMENT COULD BE VALIDLY FRAMED UPTO 31.10.2016, THEREIN PASSED THE DRAFT ASSESSMENT ORDER UNDER SEC. 144C(1) R.W.S 143(3) ON 26.10.2016. ON THE CONTRARY, IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE ORDER OF AAR WAS RECEIVED BY THE A.O (AS ORALLY CONFIRMED BY HIM) ON 24/02/2015, THEREFORE, THE DRAFT ASSESSMENT ORDER COULD HAVE BEEN PASSED LATEST BY 30/08/2015, WHICH NOT HAVING BEEN PASSED WITHIN THE SAID STIPULATED TIME PERIOD WA S THUS BARRED BY LIMITATION. IN SUPPORT OF ITS AFORESAID CLAIM THE ASSESSEE HAD FILED WITH THE A.O A COPY OF THE DESPATCH REGISTER OBTAINED FROM THE OFFICE OF THE AAR. ALSO, IT WAS OBSERVED BY THE A.O THAT MERELY PROVIDING A COPY OF THE DESPATCH REGIST ER OBTAINED FROM THE OFFICE OF THE AAR WOULD NOT PROVIDE PROOF OF SERVICE OF THE AARS ORDER. ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O REJECTED THE CLAIM OF THE ASSESSEE THAT THE DRAFT ASSESSMENT ORDER WAS BARRED BY LIMITATION. 25. ON MERITS, THE A.O, VIDE HIS DRAFT ASSESSMENT ORDER PASSED UNDER SEC. 144C(1) R.W.S 143(3), DATED 26.10.2016 , BEING OF THE VIEW THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FOR SALE OF SPECIALIZED SOFTWARE OF RS. 9,31,88,908/ - AND TOWARDS MAINTENANCE AND SUPPOR T P A G E | 22 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) SERVICES (INCLUDING UPGRADES) OF RS. 6,63,20,712/ - WERE IN THE NATURE OF ROYALTY, PROPOSED TO INCLUDE THE SAME IN THE SCOPE OF T H E TOTAL INCOME OF THE ASSESSEE, VIDE HIS DRAFT ASSESSMENT ORDER PASSED UNDER SEC. 144C(1) R.W.S 143(3), DATED 26/10/2016. 26 . OBJECTIONS FILED BY THE ASSESSEE BEFORE THE DRP VIZ. (I). THAT, THE DRAFT ASSESSMENT ORDER HAVING BEEN PASSED BY THE A.O BEYOND THE EXTENDED TIME PERIOD ENVISAGED IN CLAUSE (VI II ) OF EXPLANATION 1 TO SEC. 153 WAS THUS BARED BY LIMITATION ; (II). THAT, T HE PAYMENTS RECEIVED BY THE ASSESSEE FOR SALE OF SPECIALIZED SOFTWARE OF RS. 9,31,88,908/ - HAD WRONGLY BEEN ASSESSED AS ROYALTY BY THE A.O; AND (III). THAT, THE PAYMENTS RECEIVED BY THE ASSESSEE TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADE S) OF SOFTWARE OF RS. 6,63,20,712/ - WERE WRONGLY HELD BY THE A.O AS BEING IN THE NATURE OF ROYALTY , WERE HOWEVER REJECTED BY THE DRP. 27 . AFTER RECEIVING THE ORDER OF THE DRP UNDER SEC. 144C(5), DATED 31.07.2017, THE A.O PASSED THE FINAL ASSESSMENT ORDER UNDER SEC. 144C(13) R.W.S 143(3), DATED 31/08/2017. THE A.O INCLUDED THE AMOUNTS RECEIVED BY THE ASSE S SEE ON SALE OF SPECIALIZED SOFTWARE (RS. 9,31,88,908/ - ) AND TOWARDS MAINTENANCE AND SUPPORT SERVICES (INCLUDING UPGRADES) OF RS. 6,63,20,712/ - IN T HE TO TAL INCOME OF THE ASSESSEE AND ASSESSED ITS TOTAL INCOME AT RS. 15,95,09,620/ - . 28 . THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT FRAMED BY THE A.O UNDER SEC. 144C(13) R.W.S 143(3), DATED 31/08/2017 HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SU BMITTED BY THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES THAT THE FACTS AND THE ISSUES INVOLVED IN THE PRESENT APPEAL REMAINED THE SAME AS WERE THERE BEFORE US IN THE APPEAL OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR I.E A.Y 2010 - 11 IN ITA N O. 6481/MUM/2017. AS THE FACTS AND THE ISSUES INVOLVED IN THE PRESENT APPEAL OF THE ASSESSEE VIZ. ITA NO. 6482/MUM/2017 FOR A.Y 2011 - 12 REMAINS THE SAME AS WERE THERE BEFORE US IN ITS APPEAL FOR A.Y 2010 - 11 IN ITA NO. 6481/MUM/2017, THEREFORE, THE ORDER TH EREIN PASSED IN CONTEXT OF THE ISSUES UNDER CONSIDERATION SHALL APPLY MUTATIS MUTANDIS FOR THE PURPOSE OF DISPOSAL OF THE PRESENT APPEAL BEFORE US . ACCORDINGLY, IN TERMS OF OUR OBSERVATIONS RECORDED WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE FOR A.Y 2010 - 11 IN ITA NO. 6481/MUM/2017, THE PRESENT APPEAL OF THE ASSESSEE FOR A.Y 2011 - 12 IN ITA NO. 6482/MUM/2017 IS PARTLY ALLOWED. P A G E | 23 ITA NO. 6481 & 6482/MUM/2017 A.YS 2010 - 11 & 2011 - 12 M/S. TRIMBLE SOLUTIONS (EARLIER KNOWN AS TEKLA CORPORATION) 2 9 . THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 30 . RESULTANT LY BOTH THE APPEALS OF THE ASSESSEE VIZ. A.Y 2010 - 11 IN ITA NO. 6481/MUM/2017 AND A.Y 2011 - 12 IN ITA NO. 6482/MUM/2017 ARE PARTLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRONOUNCE D IN THE OPEN COURT O N 1 6 .12 .2019 S D / - S D / - ( PRAMOD KUMAR ) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; 16 .12. 2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI