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The Tax Publishers Flashes of : The Latest From Courts/ITAT Srivatsan Ranganathan 1. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA UNDER SECTION 9(1)(vi) *Import of software through customs--Disallowance for non-deduction of TDS--Whether hit by retrospective amendment* Facts Assessee had imported software through customs on which duty was paid. The same was claimed as purchase of goods/commodity based on Tata Consultancy Services v. State of Andhra Pradesh (2004) 271 ITR 401 (SC) which did not merit the AO who disallowed the same for non-deduction of TDs. It was the plea of the assessee that computer software was added in the statute with retrospective effect from AY 1976-77 under Section 9(1)(vi) vide Finance Act, 2012 so for the said AY 2012-13, assessee could have no way foreseen the amendment either. The FAA applied CIT v. Samsung Electronics Company Ltd. 2011 TaxPub(DT) 2175 (Karn-HC) : (2012) 345 ITR 494 (Karn) : (2011) 203 Taxman 477 (Karn) that the amendment of computer software itself was only clarificatory by the Finance Act, 2012 amendment so the scope already have covered computer software in its definition thus upheld the disallowance. On appeal by the assessee. Held Against the assessee: The assessee ought to have done TDS which in the absence of the same deserves disallowance. The importation of software is not a plea for non-deduction of TDs. *Note :* The assessee could have cited the retrospectivity of the clarificatory amendment also an impossibility of performance as a ground with various decisions which should have exonerated the liability as if there was a clarificatory amendment sought in 2012 for 1976 (after 36 years), then there was some ambiguity which has to be read in favour of the assessee. Recent decision of Asahi India Glass Limited v DCIT/ITA No. 1637/Del/2014/Del ITAT/Dated 26th February, 2018/Favour of the assessee/AY 2007-08 is a pointer on the same topic as enclosed. -- *Vide Telecomone Teleservices India Private Limited v. Deputy Commissioner of Income Tax ITA No. 1237/Bang/2016, dt. 23-3-2018 (Bang-Trib) [ 2018 TaxPub(DT) 1523 (Bang 'A-Trib)]* SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Flashes of : The Latest From Courts/ITAT

Srivatsan Ranganathan

1. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA UNDER SECTION 9(1)(vi)

Import of software through customs--Disallowance for non-deduction of TDS--Whether hit by retrospective amendment

Facts

Assessee had imported software through customs on which duty was paid. The same was claimed as purchase of goods/commodity based on Tata Consultancy Services v. State of Andhra Pradesh (2004) 271 ITR 401 (SC) which did not merit the AO who disallowed the same for non-deduction of TDs. It was the plea of the assessee that computer software was added in the statute with retrospective effect from AY 1976-77 under Section 9(1)(vi) vide Finance Act, 2012 so for the said AY 2012-13, assessee could have no way foreseen the amendment either. The FAA applied CIT v. Samsung Electronics Company Ltd. 2011 TaxPub(DT) 2175 (Karn-HC) : (2012) 345 ITR 494 (Karn) : (2011) 203 Taxman 477 (Karn) that the amendment of computer software itself was only clarificatory by the Finance Act, 2012 amendment so the scope already have covered computer software in its definition thus upheld the disallowance. On appeal by the assessee.

Held

Against the assessee:

The assessee ought to have done TDS which in the absence of the same deserves disallowance. The importation of software is not a plea for non-deduction of TDs.

Note : The assessee could have cited the retrospectivity of the clarificatory amendment also an impossibility of performance as a ground with various decisions which should have exonerated the liability as if there was a clarificatory amendment sought in 2012 for 1976 (after 36 years), then there was some ambiguity which has to be read in favour of the assessee.

Recent decision of Asahi India Glass Limited v DCIT/ITA No. 1637/Del/2014/Del ITAT/Dated 26th February, 2018/Favour of the assessee/AY 2007-08 is a pointer on the same topic as enclosed.

-- Vide Telecomone Teleservices India Private Limited v. Deputy Commissioner of Income Tax ITA No. 1237/Bang/2016, dt. 23-3-2018 (Bang-Trib) [ 2018 TaxPub(DT) 1523 (Bang 'A-Trib)]