आयकर अपीलीय अिधकरण िद(cid:671)ी पीठ “डी”, िद(cid:671)ी

(cid:373)ी िवकास अव(cid:830)थी, (cid:586)ाियक सद(cid:735) एवं

(cid:373)ी अवधेश कु मार िम(cid:373)ा, लेखाकार सद(cid:735) के सम(cid:407) IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER &

SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER आअसं.3766/िद(cid:671)ी/2023(िन.व. 2021-22)

ITA No.3766/DEL/2023 (A.Y.2021-22) Munich RE Automation Solutions Ltd., 2^nd Floor, Mountain View, Central Park, Leopardstown Office Park, Dublin, Ireland PAN : AAICM-2594-E ...... अपीलाथ(cid:7278)/Appellant बनाम Vs.

Assistant Commissioner of Income Tax, Circle International Tax-2(2)(1), New Delhi ..... (cid:7079)ितवादी/Respondent अपीलाथ(cid:334) (cid:554)ारा/ Appellant by : Shri Vishal Kalra, Ms. Reema Grewal, and Ms. Snigdha Gautam, Advocates (cid:366)ितवादी(cid:554)ारा Respondent by : Ms. Ekta Jain, CIT-DR &

/

Ms. Neeju Gupta, Sr. DR सुनवाई क(cid:7409) ितिथ/ Date of hearing : 06/06/2025 घोषणा क(cid:7409) ितिथ/ Date of pronouncement : : 04/09/2025 आदशे /ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the assessment order dated

25.10.2023 passed u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’), for AY 2021-22.

2. Shri Vishal Kalra, Advocate appearing on behalf of the assessee at the outset submitted that he is not pressing ground no. 2 of appeal challenging validity of assessment order on the ground of limitation.

2.1. The ld. Counsel for the assessee submits that in ground no. 3 and 4 of appeal, the assessee has assailed the assessment order holding the receipts aggregating to Rs.3,56,51,494/- received by the assessee/appellant on sale of software and incidental services (software support and maintenance services) to the end customers in India taxable as royalty under the Act and Article 12 of India-

Ireland Double Tax Avoidance Agreement (DTAA).

3. Narrating facts of the case, the ld. Counsel submits that the assessee is headquartered in Ireland and is a tax resident of Ireland. Its business activities are entirely carried out from outside India. The assessee develops a software solution. During the period relevant to assessment year under appeal, the assessee has provided software and related services to its Indian customer-PNB MetLife India Insurance Company Ltd. (in short ‘PNB MetLife’) for a total consideration of Rs.3,56,51,494/-. The Indian customer deducted Tax at Source (TDS) Rs.92,93,382/- on the payments made to the assessee. As per the assessee aforesaid amount received by the assessee is not taxable in India. The assessee filed its return of income for the AY 2021-22 declaring NIL income and claiming refund of the TDS amount appearing in Form No. 26AS.

3.1. In scrutiny assessment proceedings, the Assessing Officer (AO) held the receipts of the assessee from Indian customer as ‘royalty’ within the meaning of section 9(1)(vi) of the Act and as well as under Article 12(3)(a) of India-Ireland DTAA. The ld. Counsel for the assessee submitted that the assessee has sold/licensed a software to its Indian customer i.e. PNB MetLife. The assessee is charging fee in consideration of providing access to the licensed software to its Indian customer and the incidental services rendered. The assessee has not transferred any right in the software developed. Hence, the consideration received by granting license for use of software cannot be taxed as a ‘royalty’.

4. The ld. Counsel submits that the company has entered a Master Procurement Agreement (MPA) dated 28.01.2020 with PNB MetLife. The said agreement is at page no. 17 to 68 of the paper book. Referring to the agreement, he submitted that the scope of work has been bifurcated into two Statements of Work annexed to the agreement as Statement of Work no. 01 (SOW-1) and Statement of Work no. 02 (SOW-2). SOW-1 is in respect of License, Support and Maintenance and SOW-2 is qua Implementation Services. The ld. Counsel referred to the definition cla