B.R. Baskaran ORDER
George George K., Member (J)
1. This appeal at the instance of the assessee is directed against final assessment order dated 01.03.2019 passed u/s. 143(3) r.w.s. 147 r.w.s. 144C of the I.T. Act. The relevant assessment year is 2010-2011.
2. The solitary issue raised is whether the amounts received by the assessee on account of sale of software and other incidental receipts would constitute royalty within the meaning of section 9(1)(vi) of the I.T. Act and Article 12 of the DTAA between India and Australia.
3. The brief facts of the case are as follow:
The assessee is a foreign company. It is engaged in the business of development and licencing of software products. During the relevant assessment year, it had sold software to various Indian customers. It was noticed by the Department that the amounts received by assessee for the sale of software/licences is in the nature of royalty in view of the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Samsung Electronics Limited reported in MANU/KA/0605/2009 : 320 ITR 209. Since the assessee did not file return of income for the relevant assessment year, notice was issued u/s. 148 of the I.T. Act. In response to the notice issued u/s. 148, the assessee filed return of income for assessment year 2010-2011 on 02.08.2017. During the course of assessment proceedings, it was seen that the assessee had received total amount of Rs. 1,15,40,710 on account of sale of software licences and provision of software maintenance and related training services. The assessee submitted that the sale of software and maintenance software services ought not have been considered as royalty and be brought to tax in India for the following reasons:-
• The payment is for use of a copyrighted article and not use of copyright;
• Distributors do not have the right to copy/reproduce the software;
• Distributors/Customers do not own any of the IPR in and to the Software;
• Payments is not for the rendering of any service that makes available any technical knowledge, experience, skill, know how;
• Income from sale of Software would not qualify as Royalty income as per Article 12 of the treaty.
4. The Assessing Officer, however, rejected the contentions of the assessee and passed draft assessment order by bringing to tax an amount of Rs. 1,15,40,710 received by the assessee on account of sale of software licences and other incidental receipts. The AO/TPO held the receipts constituted 'royalty' as defined in section 9(1)(vi) of the I.T. Act and Article 12 of the DTAA between India and Australia. The AO also placed reliance on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Samsung Electronics Limited (supra).
5. Assessee filed objections before the DRP. The DRP vide its order dated 08.02.2019 confirmed the view of the A.O. in the draft assessment order. Consequent to the DRP's direction, the final assessment order was passed on 01.03.2019.
6. Aggrieved by the final assessment order, the assessee has filed the present appeal before the Tribunal. The learned AR submitted that the issue in question is squarely covered in favour of the assessee by the judgment of the Hon'ble Apex Court in the case of Engineering Analysis Centre of Excellence P. Ltd. v. CIT reported in