DCIT, InternationalTaxation,Circle-1(3)(1), New Delhi V. Gemcom Software Australia Pty Ltd, Perth

ITA 7452/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7882 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S TOMAR
• Keywords: Capital asset converted into stock in trade; Double taxation relief; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI D BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.7452/DEL/2017 ASSESSMENT YEAR : 2014-15 DCIT, INTERNATIONAL TAXATION, CIRCLE-1(3)(1), NEW DELHI. VS GEMCOM SOFTWARE AUSTRALIA PTY LTD., LEVEL-8, 190, SAINT GEORGES TERRACE, PERTH WA, PERTH 6000 FOREIGN 999999 PAN-AAECG9585H APPELLANT RESPONDENT APPELLANT BY SH.KUMAR PRANAV, SR. DR RESPONDENT BY SH. VISHAL KALRA, ADV. & SH. S.S.TOMAR, ADV. DATE OF HEARING 0 6 .0 9 .2021 DATE OF PRONOUNCEMENT 0 6 .09 .2021 ORDER PER KUL BHARAT, JM : THE PRESENT APPEAL FILED BY REVENUE FOR THE ASSES SMENT YEAR 2014- 15 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-42, NEW DELHI DATED 25.09.2017. THE REVENUE HAS RAISED FOLLOWING GROUN DS OF APPEAL:- 1.1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY T HE AO HOLDING THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE FOR SALE/DISTRIBUTION OF SOFTWARE TO THE INDIAN ENTITY CANNOT BE TAXED A ROYALTY AS PROVIDED IN THE ARTICLE 12 OF THE INDI A-AUSTRALIA DTAA? 1.2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE BY THE AO AND NOT CONSIDERING THE EXPLANATION 5 & 5 TO SECTION 9 OF THE INCOME TAX ACT, 1961? ITA NO. 7452/DEL/2017 2 | P A GE 1.3 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN RELYING ON THE CASE OF DIT VS I NFRASOFT LTD. (DELHI) REGARDLESS OF THE FACTS THAT AN APPEAL HAS BEEN FIELD BEFORE THE HON'BLE SUPREME COURT AGAINST THE ORDER FOR ADJUDICATION? 2. THE APPELLANT CRAVES LEAVE TO ADD, MODIFY, AME ND OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF, OR BEFORE, THE HE ARING OF APPEAL. 2. HOWEVER, LD. COUNSEL FOR THE ASSESSEE POINTED OU T THAT THE PRESENT APPEAL PERTAINING TO ASSESSMENT YEAR 2014-15 DESERV ES TO BE WITHDRAWN AS THE TAX EFFECT INVOLVED IN THE CASE IS BELOW RS.50 LACS. 3. LD. SR. DR COULD NOT CONTROVERT THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. 4. THE CBDT VIDE CIRCULAR NO.17/2019 DATED 08.08.20 19 HAS REVISED THE MONETARY LIMIT FOR FILING THE APPEALS BEFORE TH E TRIBUNAL TO RS.50 LACS. FURTHER, CBDT VIDE LETTER DATED 20.08.2019 HAS ALSO CLARIFIED THAT CIRCULAR NO.17/2019 WOULD BE APPLICABLE TO ALL PENDING APPEA LS. IN SUCH CIRCUMSTANCES, THE PRESENT APPEAL FILED BY THE REVE NUE IN CASE OF LOW TAX EFFECT IS NOT MAINTAINABLE. 5. BEFORE PARTING, WE CLARIFY HERE THAT THE REVENUE SHALL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RE-INSTITUTION OF APPEAL, IF THE REQUISITE MATERIAL IS BROUGHT TO SHOW THAT THE APPEAL IS PROTECTED BY THE EXCEPTIONS PRESCRIBED IN PARA 10 OF THE CIRCULAR DATED 11.07.2018. ITA NO. 7452/DEL/2017 3 | P A GE 6. IN CONCLUSION, BY APPLYING THE CBDT CIRCULAR DAT ED 08.08.2019 AND LETTER DATED 20.08.2019 (SUPRA), THE CAPTIONED APPE AL OF THE REVENUE IS DISMISSED AS WITHDRAWN/NOT PRESSED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 06 TH SEPTEMBER, 2021. SD/- SD/- (ANIL CHATURVEDI) (KUL BHARAT) ACCOUNTANT MEMBER JUDI CIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI