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NR supplying software services to Oil Co. not eligible to take benefit of presumptive taxation u/s 44BB: HC

March 17, 2020[2020] 115 taxmann.com 254 (Delhi)

INTERNATIONAL TAXATION : Where assessee, an Australian company, engaged in business of developing and providing customized software enabled solutions and annual maintenance services which were used by oil and gas industry in relation to excavation, extraction, production activities and seismic analysis, opted to be taxed on presumptive basis under section 44BB(1) whereas revenue authorities opined that 'supply of software' was 'royalty' and 'other services' were 'FTS' and accordingly assessee was liable to pay tax under section 44DA, in view of fact that question as to whether services of updating software/renewal of license or warranty services or maintenance of software were inextricably and essentially linked to supply of software and were ancillary services was a question of fact that would require determination after examining dominant purpose of such contracts, however, there was no factual clarity on said aspect, impugned order was to be set aside and, matter was to be remanded back to Commissioner (Appeals) to assess assessee's income and tax payable thereon by first determining nature of income/receipts in hands of assessee

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