Madras High Court
Principal Commissioner Of ... vs M/S. Saipem India Projects ... on 20 December, 2021
TCA. Nos. 551, 556 and 557 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 20.12.2021
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A. Nos. 551, 556 and 557 of 2021
and
C.M.P. Nos. 19971 and 19985 of 2021
T.C.A. No. 551 of 2021 :-
Principal Commissioner of Income-Tax
Company Circle-VI(I)
Chennai. ... Appellant
Versus
M/s. Saipem India Projects Private Limited
Yarlagadda Towers, 4, Fourth Lane
Off. Nungambakkam High Road
Chennai – 600 034.
PAN : AAA CI 7915 F .. Respondent
Tax Case Appeal filed under Section 260-A of the Income Tax Act,
1961 against the order dated 23.10.2017 passed by the Income Tax Appellate
Tribunal, Madras 'A' Bench, in I.T.A. No. 1867/Mds/2017 for the assessment
year 2014-15.
T.C.A. No. 556 of 2021 :-
Principal Commissioner of Income-Tax
Company Circle-VI(I)
Chennai. .. Appellant
https://www.mhc.tn.gov.in/judis Versus
TCA. Nos. 551, 556 and 557 of 2021
M/s. Saipem India Projects Private Limited
Yarlagadda Towers, 4, Fourth Lane
Off. Nungambakkam High Road
Chennai – 600 034.
PAN : AAA CI 7915 F .. Respondent
Tax Case Appeal filed under Section 260-A of the Income Tax Act,
1961 against the order dated 23.10.2017 passed by the Income Tax Appellate
Tribunal, Madras 'A' Bench, in I.T.A. No. 1864/Mds/2017 for the assessment
year 2011-12.
T.C.A. No. 557 of 2021 :-
Principal Commissioner of Income-Tax
Company Circle-VI(I)
Chennai. .. Appellant
Versus
M/s. Saipem India Projects Private Limited
Yarlagadda Towers, 4, Fourth Lane
Off. Nungambakkam High Road
Chennai – 600 034.
PAN : AAA CI 7915 F .. Respondent
Tax Case Appeal filed under Section 260-A of the Income Tax Act,
1961 against the order dated 23.10.2017 passed by the Income Tax Appellate
Tribunal, Madras 'A' Bench, in I.T.A. No. 1862/Mds/2017 for the assessment
year 2009-10.
For Appellant : Mr. Karthik Ranganathan
in all the appeals
For Respondent : Mr. P.Chidambaram
in all the appeals
https://www.mhc.tn.gov.in/judis
TCA. Nos. 551, 556 and 557 of 2021
COMMON JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.)
These tax case appeals have been filed by the appellant/Revenue, calling
in question the correctness of the common order dated 23.10.2017 passed by
the Income Tax Appellate Tribunal, 'A' Bench, Chennai, relating to the
assessment years 2009-10, 2011-12 and 2014-15, by raising the following
substantial questions of law:-
“1. Whether on the facts and circumstances of the case
and in law, the Tribunal was correct in holding that the amounts
paid by the assessee to the foreign company for the use of
copyright of 'computer software' was not 'royalty' and that the
same did not give rise to any 'income' taxable in India and,
therefore, the assessee was not liable to deduct any tax at
sources?
2. Whether on the facts and circumstances of the case and
in law, the Tribunal was right in holding that mere transfer of
right to use copyright software did not amount to royalty
particularly when there has been retrospective additions to
Explanations 4 to 6 to Sec. 9(1)(vi) of the Income Tax Act, 1961
even though there are no similar explanatory addition in the
DTAA and the DTAA provision clearly mention that the use of a
copyright amount to royalty?
3. Whether on the facts and circumstances of the case and
in law, the Tribunal was right in holding in favour of the
assessee by placing reliance inter alia on the decision of Hon'ble
High Court in the case of DIT vs. Infrasoft Ltd. (2013) 39
Taxmann.com 88 / 2014 220 Taxmann 273 (Delhi) when the
issues involved are clearly distinguishable to the present case on
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TCA. Nos. 551, 556 and 557 of 2021
hand?
4. Whether on the facts and circumstances of the case and
in law, the Tribunal was right in holding that its mere a transfer
of right to use copyrighted article, without appreciating the fact
that when a copyrighted article is permitted or licenses to be
used for a fee, the permission involves the use of or the right to
use the copyright embedded therein and hence, such 'right to
use' amount to 'royalty' even in the provisions of DTAA
concerned?”
2. When these appeals are taken up for hearing today, the learned
counsel appearing for both sides jointly submitted that the substantial
questions of law raised herein have been decided in favour of the assessee, in
the decision of the Hon'ble Supreme Court in the case of Engineering
Analysis Centre of Excellence Private Limited v. Commissioner of Income
Tax and another reported in (2021) SCC Online SC 159 which was followed
by a Co-ordinate Bench of this Court in T.C.A. No. 150 of 2015 dated
03.09.2021.
3. It is also submitted by the learned counsel for the appellant /
Revenue that the tax effect in these appeals is less than the threshold limit and
hence, the same may be permitted to be withdrawn, in the light of the Circular
No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes,
wherein, it is stipulated that appeal shall not be filed/pursued by the
Department before the High Court in cases, where the tax effect does not
https://www.mhc.tn.gov.in/judis
TCA. Nos. 551, 556 and 557 of 2021
exceed Rs.1,00,00,000/- (Rupees One Crore).
4. In view of the above submissions made by the learned counsel for
the appellant / Revenue, the present appeals, wherein, the tax effect is said to
be less than the monetary limit imposed, are dismissed as withdrawn. No costs.
Consequently, connected miscellaneous petitions are closed.
[R.M.D,J.] [M.S.Q, J.]
20.12.2021
Internet : Yes / No
Index : Yes / No
Maya/rsh
To
1. The Commissioner of Income Tax
Circle-I
Madurai-625 002.
2. The Income Tax Appellate Tribunal,
Chennai 'A' Bench.
https://www.mhc.tn.gov.in/judis
TCA. Nos. 551, 556 and 557 of 2021
R. MAHADEVAN, J
and
MOHAMMED SHAFFIQ, J
Maya/rsh
TCA Nos. 551, 556 and 557 of 2021
20.12.2021
(½)
https://www.mhc.tn.gov.in/judis
