Income Tax Appellate Tribunal Chennai Acit Company Circle Vi(1), Chennai vs Saipem India Projects Private Limited, ... on 23 December, 2019 आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई। IN THE INCOME TAX APPELLATE TRIBUNAL 'C' ी एन.आर.एस. गणेशन, या यक सद य एवं ी र!मत कोचर, लेखा सद य के सम& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No.1210/Chny/2019 नधा'रण वष' /Assessment Year: 201415 The Asst. Commissioner of Income v. M/s.Saipem India Projects Tax, Company Circle6(1), Pvt. Ltd., Yarlagadda Towers, Chennai. 4, Fourth Floor, Nungambakkam Mahatama Gandhi Road, Chennai600 034. [PAN: AAACI 7915 F] (अपीलाथ*/Appellant) (+,यथ*/Respondent) Department by : Mr. J.Pavithran Kumar, JCIT Assessee by : Mr.Pranith Golecha, CA / Mr.N.Ananthakrishnan, CA सुनवाई क. तार ख/Date of Hearing : 30.09.2019 घोषणा क. तार ख /Date of Pronouncement : 23.12.2019 आदे श / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal filed by Revenue is directed against appellate order dated 30.01.2019 passed by learned Commissioner of Income Tax (Appeals)15, Chennai (hereinafter called "the CIT(A)"), in ITA No.601/201617/CIT(A)15 for assessment Year (ay) 201415, the appellate proceedings before learned CIT(A) had arisen from assessment order dated 17.11.2017 passed by learned Assessing Officer (hereinafter ITA No.1210/Chny/2019 : 2 : called "the AO") u/s.143(3) read with Section 92CA(3) of the Incometax Act, 1961 (hereinafter called "the Act"). 2. The grounds of appeal raised by Revenue in memo of appeal filed with IncomeTax Appellate Tribunal, Chennai (hereinafter called "the Tribunal") read as under: "1. The order of the Ld. CIT(A) is contrary to the law and facts of the case. 2. The Ld. CIT(A) erred in deleting the disallowance of deduction u/s 40(a)(i) of the Act of Rs.5.59 crores by relying on the decision of the Hon'ble Tribunal vide ITA No.1862 to 1868/Mds/2017 dated 23102017 for AYs 200910 to 201516 in the assessee's own case, decided in favour of the assessee. 2.1. The Ld. CIT(A) ought to have appreciated that payment towards software was for the purpose of obtaining licence and would therefore constitute royalty. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer be restored." 3. The brief facts of the case are that the assessee is engaged in business of engineering and procurement assistance services, design and execution of large scale oil & gas onshore and offshore projects, cryogenic tanks, etc. The assessee had purchased certain software licenses from M/s.Saipem SPA, Italy, which were used by assessee for providing services to customers for various support functions in accounting, reporting, etc. . The AO made disallowance of aforesaid expenses claimed by assessee by invoking provisions of Section 40(a)(i) of the 1961 Act as the assessee had not deducted incometax at source as required u/s 195 of the 1961 Act while making payment to M/s Saipem SPA, Italy, by holding that the aforesaid payments are Royalty payment u/s 9(1)(vi) of the 1961 Act and Article 13(3) of IndiaItaly DTAA which were subject to incometax deduction at source u/s 195 of the 1961 Act, vide assessment ITA No.1210/Chny/2019 : 3 : order dated 17.11.2017 passed by AO u/s 143(3) read with Section 92CA(3) of the 1961 Act , is reproduced hereunder: "3. Disallowance u/s.40(a)(i): 3.1 During the course of scrutiny proceedings the assessee was requested to furnish details of amount debited under the head "software support charges" of Rs.18,63,35,391/ and the assessee was also requested to furnish the details of TDS done along with copy of agreement, invoices etc. The assessee furnished elaborate submissions in this regard along with copy of agreement for making such payments. Prima facie, it is seen that these