Aravind Kumar, J.@mdashThe revenue is in appeal assailing the order of the Income tax Appellate Tribunal passed in ITA No. 290/Bang/3002
dated 6-1-2006.
2. At the time of admission of this appeal the following substantial questions of law has been formulated on 7-8-2007 to consider the question of
law formulated in I.T.A. No. 265/2006.
1. Whether the Tribunal was correct in holding that the assessee is not liable to deduct TDS in respect of payments made for purchase of software
as the same cannot, be treated as income liable to tax in India as Royalty or Scientific Work u/s 9 of the Act read with Double Taxation Avoidance
Agreements and treaties.
2. Whether the Tribunal was correct in holding that since the assessee had purchased only a right to use the copyright i.e., the software and not the
entire copyright itself, the payment cannot be treated as Royalty as per the Double Taxation Avoidance Agreement and Treaties which is beneficial
to the assessee and consequently Section 9 of the Act should not take into consideration.
3. Whether the Tribunal should have recorded a finding that it is u/s 195(2) and (3) and (4) of the Act, the chargeability to tax or not of the
recipient is decided and having failed to obtain such a decision the assessee was bound to deduct tax at source as held by the Apex Court in The
Transmission Corporation of A.P. Ltd. and Anr Vs. The Commissioner of Income Tax, A.P., .
4. Whether the assessee. can question the taxability of the recipient in Section 201(1) of the Act proceeding when the assessee has to show only
without good and sufficient reasons failed to deduct and pay tax"", which has not been shown in the facts of the present case and non taxability
cannot be taken as a sufficient reason, when Section 195(2)(3)(4) of the Act certificate is not. obtained.
5. Whether the Tribunal was correct in holding that the payment partakes the character of purchase and sale of goods and therefore cannot be
treated as royalty payment liable to Income Tax.
3. We have heard Sri. M.V. Seshachla learned Counsel for appellants and Sri. Suryanarayana, learned Counsel appearing for the respondent and
it is brought to the notice of the Court during the course of arguments the questions of law formulated in ITA 265/2006 has been answered by this
Court on 24-9-2009 in ITA 2808/2005 connected with other matters including ITA 265/2006 by answering the questions of law in favour of the
revenue and against the assessee.
4. Accordingly, following the said judgment we answer the questions of law formulated herein above in favour of the revenue and against the
assessee. The appeal is allowed. Parties to bear their costs.
