M/s TelecomOne Teleservices India Pvt. Ltd., Bangalore V. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

MA 115/BANG/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6745 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSANTHOMAS
• Assessee Lawyers: CHERIAN K BABU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER [MP NO. 115/B/2018 (IN ITA NO. 1 237 /B/201 6 )] (ASSESSMENT YEAR: 20 1 2 - 1 3 ) M/S. TELECOMONE TELESERVICES INDIA PRIVATE LIMITED, SRISHTI, # 243, 2 ND FLOOR, 1 ST BLOCK, 9 TH MAIN, HRBR LAYOUT, BANASWADI, BENGALURU 560 043. PAN : AACCT 3947 J APPLICANT VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(1), BENGALURU. RESPONDENT APPLICANT BY : SHRI . CHERIAN K. BABU, CA REVENUE BY : SMT. SUSAN THOMAS , ADDL. CIT DATE OF HEARING : 0 1 / 0 6 /201 8 DATE OF PRONOUNCEMENT : 08 / 0 6 /201 8 O R D E R PER SUNIL KUMAR YADAV, JM : THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE WITH THE SUBMISSION THAT TRIBUNAL HAS NOT CONSIDERED THE FACT THAT THE ASSESSEE WAS A TRADER AND PURCHASED A SOFTWARE FOR ITS RESALE. THEREFORE, THE PAYMENT MADE ON ITS PROCUREMENT CANNOT BE TERMED TO BE ROYALTY. IT WAS FURTHER CONTENDED THAT TRIBUNAL HAS DECIDED THE ISSUE WITHOUT LOOKING TO THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DYNAMIC VERTICAL SOFTWARE INDIA PVT. LTD., [2011] 12 TAXMANN.COM 431 (DEL). SINCE THE TRANSACTION IN THE INSTANT CASE IS A MERE RE-SALE [MP NO. 115/B/2018 IN ITA NO.1237/B/2016)] PAGE 2 OF 3 OF SOFTWARE, THE JUDGMENT OF THE HONBLE DELHI HIGH COURT OUGHT TO HAVE BEEN APPLIED. HE HAS ALSO PLACED RELIANCE UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF BODHI PROFESSIONAL SOLUTIONS PVT. LTD., VS. ITO [2015] 56 TAXMANN.COM 339 (BANGALORE TRIB) IN WHICH THE MATTER WAS REMANDED BACK TO THE AO TO EXAMINE THE FACTS ON MERIT. THE LEARNED DR ON THE OTHER HAND HAS CONTENDED THAT NEITHER BEFORE THE TRIBUNAL NOR BEFORE THE LOWER AUTHORITIES, SUCH ARGUMENT WAS EVER RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE. MOREOVER, NONE OF THE LOWER AUTHORITIES HAVE DWELT UPON THE ISSUE AS TO WHETHER THE SOFTWARE WAS ACQUIRED FOR ITS OWN USE OR FOR ITS RESALE. THEREFORE, NO NEW FACTS CAN BE RAISED IN MISCELLANEOUS APPLICATION. 2. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT BEFORE THE LOWER AUTHORITIES, ASSESSEE HAS NOT RAISED ANY PLEA THAT HE ACQUIRED THE SOFTWARE FOR ITS RESALE. THE DISPUTE BEFORE THE LOWER AUTHORITIES WAS THAT WHETHER THE AMOUNT PAID FOR SUPPLY OF SOFTWARE WOULD BE CONSTRUED AS ROYALTY IN TERMS OF THE PROVISIONS OF THE INCOME TAX ACT (HEREINAFTER CALLED AS AN ACT) AND CONSEQUENTLY ASSESSEE IS LIABLE TO WITHHOLD TAX AND IN TERMS OF THE RELEVANT PROVISIONS OF THE ACT. EVEN NO SPECIFIC GROUND WAS RAISED IN THIS REGARD BEFORE THE TRIBUNAL. THE TRIBUNAL HAS EXAMINED THE ISSUE OF NATURE OF PAYMENT ON IMPORT OF SOFTWARE AND RELYING UPON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAMSUNG ELECTRONICS COMPANY LTD., [2011] 16 TAXMANN.COM 141 (KAR), THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE CIT(A), HOLDING THE NATURE OF PAYMENT TO BE ROYALTY. SINCE NO ARGUMENT HAS BEEN RAISED EITHER BEFORE THE LOWER AUTHORITIES OR BEFORE THE TRIBUNAL DURING THE COURSE OF HEARING OF THE APPEAL, THIS ARGUMENT CANNOT BE ENTERTAINED WHILE ADJUDICATING THE MISCELLANEOUS APPLICATION. MOREOVER, NO EVIDENCE WAS PRODUCED TO DEMONSTRATE THAT THIS SOFTWARE WAS ACQUIRED FOR ITS RESALE. THEREFORE, WE ARE OF THE VIEW THAT TRIBUNAL HAS ADJUDICATED THE ISSUE IN THE LIGHT OF MATERIAL AVAILABLE BEFORE IT AND [MP NO. 115/B/2018 IN ITA NO.1237/B/2016)] PAGE 3 OF 3 ARGUMENTS ADVANCED BY THE PARTIES. THEREFORE, WE FIND NO ERROR APPARENT IN THE ORDER OF THE TRIBUNAL. ACCORDINGLY, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE STANDS DISMISSED. 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH JUNE, 2018. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BANGALORE DATED : 08/06/2018 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.