| आयकर अपीलीय अिधकरण (cid:12)ायपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER &

SHRI ANIKESH BANERJEE, HON’BLE JUDICIAL MEMBER I.T.A. No. 1879/Mum/2025 Assessment Year: 2022-23 Dassault Systemes SolidWorks The Asst. Commissioner of Corporation Vs Income-tax (International C/o Deloitte Haskins and Sells LLP Taxation) – 2(1)(2), Mumbai

7th Floor, ASV Ramana Towers

52, Venkatnarayana Road Chennai - 600017 [PAN: AAFCS8787E]

अपीलाथ(cid:22)/ (Appellant) (cid:23)(cid:24) यथ(cid:22)/ (Respondent)

Assessee by : Shri S.P. Chidambaram, A/R Revenue by : Shri Satya Pal Kumar, CIT D/R सुनवाई की तारीख/Date of Hearing : 03/09/2025 घोषणा की तारीख /Date of Pronouncement : 09/09/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM:

This appeal by the assessee is preferred against the order dated

22/01/2025 u/s 143(3) r.w.s. 144C(13) of the Act, pertaining to AY 2022-

23.

2. The grievance of the assessee can be summarized as under:-

“1. To quash the final assessment order passed by the AO under section

143(3) read with section 144C(13) of the Act.

2. To hold the income of the Appellant amounting to INR 1,51,83,65,306 not chargeable to tax in India as per the provisions of the Double Taxation Avoidance Agreement between India and USA or under the Act.

3. To delete the levy of interest under section 234B of the Act.

4. To pass such other orders as your Honours may deem fit considering the facts and circumstances of the case in accordance with the provisions of the Act.”

3. Briefly stated the facts of the case are that the assessee is a company registered in the USA and is a resident of USA for the purpose of taxation. The company is engaged in the business of developing and marketing of 3Dmechanical design solutions. The assessee had entered into software distribution agreements with resellers India who buy software from the assessee and in tum sell to customers in India. During the year under consideration, the assessee has offered to tax the Royalty Income of Rs. 29,70,239/- @10% as per Act and Interest on Income tax refund of Rs.66,69,707/-@15% as per DTAA. However, the assessee has not offered an amount of Rs. 1,51,83,65,306/- received on account of Sale of shrink- wrapped software which has not been offered for taxation for the following reasons:



The assessee does not impart any right in the software to the resellers in India.



The reseller/ end user has no right to reproduce or replicate the software.



The receipts are not in the nature of royalty since the sale of the shrink wrap software is for the purpose of resale in India.



The receipt cannot be termed as royalty as per the DTAA between India and USA.



In the absence of any amendments to the DTAA, the payments cannot be held to be royalty even after the retrospective amendments to section 9(1)(vi) of the Act.

4. During the course of scrutiny assessment proceedings vide notice dated 12/01/2024, the assessee was asked to showcause as to why addition should not be made in line with the assessment order of earlier years.

4.1. From the above it is clear that the assessment proceedings are based upon the findings given in earlier years assessment orders. At the very outset, the ld. Counsel stated that in the earlier assessment years, the impugned issue has been decided by the Co-ordinate Benches in favour of the assessee and against the revenue, right from AY 2005-06 to AY 2021-22. The ld. Counsel also pointed out that the order of the Co- ordinate Bench in AY 2011-12 has been affirmed by the Hon’ble High Court of Bombay in Income Tax Appeals No. 302 of 2018. The ld. D/R could not bring any distinguishing decision in favour of the revenue.

5. After giving a thoughtful consideration to the orders of the authorities below, we have carefully perused the orders of the Co- ordinate Benches. It would suffice to refer to one of the decisions of the Co-ordinate Bench in ITA No. 4534/Mum/2023; AY 2021-22, were similar quarrel was considered a