A4, Talegaon Dabhade Industrial Area, Circle1, Taluka Maval 410507 Pune MaharashtraIndia PAN : AABCH9478D Appellant Respondent Assessee by Shri Rahul Charkha Revenue by Shri Anurag Srivastava Date of hearing 24092021 Date of pronouncement 27092021 आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the final assessment order dated 05032021 passed by the Assessing Officer (AO) u/s.143(3) r.w.s.144C(13) of the Incometax Act, 1961 (hereinafter also called 'the Act') in relation to the assessment year 201617. 2. Briefly stated, the facts of the case are that the assessee is a company incorporated in the USA. It is engaged in the development and manufacture of hydraulic and electro hydraulic and electro hydraulic controls for offhighway and automotive applications. The 2 ITA No.145/PUN/2021 Husco International Inc., assessee assists Original Equipment Manufacturers (OEMs) throughout the product development process. A return was filed declaring certain international transactions. The AO made a reference to the Transfer Pricing Officer (TPO) for determining the Arm's Length Price (ALP) of the international transactions. The TPO accepted all the transactions at ALP. During the course of draft assessment proceedings, the AO observed that total receipts of the assessee from Indian operations amounted to Rs.30,40,10,666/, against which it had shown only receipts of Rs.6.29 crore as income. The assessee was show caused as to why the remaining revenue amounting to Rs.24,10,95,476/ be not charged to tax. In the absence of any detail or explanation forthcoming from the side of the assessee, the AO held the remaining amount of Rs.24.10 crore as receipts in the nature of Royalty/Fees for Technical Services (FTS) within the meaning of section 9(1)(vi)/9(1)(vii) and added it to the total income. The assessee approached the Dispute Resolution Panel (DRP) which allowed relief in respect of some of the items of revenue. For the remaining items of the revenue, the assessee has come up in appeal before the Tribunal. 3. We have heard the rival submissions and gone through the relevant material on record. The four items of revenue included by 3 ITA No.145/PUN/2021 Husco International Inc., the AO in the total income which have been assailed in the extant appeal are as under: i. Capital goods sales Rs.96,58,128/ ii. Reimbursement of travelling, freight and other Rs.12,68,764/ iii. Reimbursement of internet charges (received) Rs.30,31,448/ iv. Allocation of insurance charges (received) Rs.1,62,666/ 4. We espouse the above items ad seriatim for consideration and decision. The first item of sale of capital goods amounting to Rs.96,58,128/ has two components, namely, revenue from software licenses amounting to Rs.86,55,225/; and revenue from sale of other capital goods amounting to Rs.10,02,903/. Insofar as the revenue from software licenses is concerned, the assessee claimed before the DRP that it centrally negotiated and procured standardized software from third party vendors for its own use as well as other group entities globally. It was put forth that the allocation of such costs was done between the group entities on costtocost basis without any mark up. Copies of invoices of third party vendors were produced as additional evidence. The DRP called for a remand report from the AO with reference to such additional evidence. The AO in his remand report submitted that the assessee's contention of the amount being in the nature of reimbursement of expenses was not tenable. He further opined that the issue of software licenses was disputed and pending before the Hon'ble Supreme Court and hence 4