The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has recently, in an appeal filed before it, held that the sale proceeds of software are not taxable under Indo- Ireland DTAA.
The aforesaid observation was made by the Kolkata Bench when an appeal was preferred before it by the Revenue, as against the order of the Commissioner of Income Tax (Appeals) Kolkata, dated 31.10.2019, passed under section 250 of the Income Tax Act, 1961 for assessment year 2014-15.
The issue involved in the appeal being the question as to whether, on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals), has erred in holding that the receipts under the head “sale of software amounting to Rs.12,90,82,728/- is not taxable in India, and also as to whether the Commissioner of Income Tax (Appeals) has erred in not appreciating that the receipts under the head Sale of software are in the nature of royalty under the amended section of 9(1)(vi) of the Income Tax Act, 1961, it was submitted by Shri Rahul Saha, the Counsel for the assessee that the issue involved in this appeal, which is qua for the claim of exemption of the assessee allowed by the CIT(Appeals) ,of Rs.12,90,82,728/- ,is covered in its own case vide the order of the Coordinate Bench in ITA No. 313/KOL/2017, dated 30.04.2019 ,wherein it has been held that the sale of software is not in the nature of royalty under section 9(1)(vi) of the Act, thus deciding identical issue in favour of the assessee.
The A.R., therefore, pleaded that the present appeal of the Revenue may be dismissed in view of the said decision in assessee’s own case as stated above, while on the other hand, Shri Amal Kamat, (CIT), the D.R. on behalf of the Revenue, fairly conceded that the issue has been decided in favour of the assessee in A.Y. 2013-14, yet strongly supported the order of the Assessing Officer.
“We have heard the rival contentions and perused the relevant material available on record including the impugned order in assessee’s own case in ITA No.313/KOL/2017 for A.Y. 2013-14, and we find that the identical issue has been decided in favour of the assessee.”, the ITAT Bench comprising of Rajpal Yadav, the Vice-President (KZ) and Rajesh Kumar, the Accountant Member observed.
Thus, dismissing the Revenue’s appeal, the Kolkata ITAT held:
“Since the facts of the case before us are materially same to one as decided by the Coordinate Bench, we, therefore, respectfully following the same, uphold the order of ld. CIT(Appeals) by dismissing the appeal of the revenue.”
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