M/s Kaseya Software India Private Limited , Bangalore Vs Deputy Commissioner of Income Tax Circle-4(1)(1), Bangalore

IN THE INCOME TAX APPELLATE TRIBUNAL
“B” BENCH : BANGALORE

BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND
SMT. BEENA PILLAI, JUDICIAL MEMBER

ITA No. 1304/Bang/2018
Assessment year : 2013 – 14

M/s Kaseya Software India Private Limited,
C/o M/s Suresh & Co.,
Chartered Accountants,
#43/16, ‘Srinidhi’, 1st Floor,
Surveyor Street, Basvangudi,
Bangalore – 560004
PAN : AADCK3905A
Vs.
DCIT Circle – 4 (1) (1),
Bengaluru
APPELLANT RESPONDENT

Assessee by : Shree D. S.Vivek, C. A.
Revenue by : Shree Priyadarshi Mishra, JCIT DR
Date of hearing : 05.10.2020
Date of Pronouncement : .10.2020

O R D E R

PER ARUN KUMAR GARODIA, A. M.: This appeal is filed by the assessee and the same is directed against the order of learned CIT (A) – 12 Bengaluru dated 22.02.2018.

2. The Grounds raised by the assessee are as under:-

1. The CIT(A) has erred in stating that TDS u/s 195 was applicable on the software expenses of Rs. 2,13,03,772/- without appreciating the fact that appellant was merely acting as a distributor and not having right to have a copy of the software.

2. The CIT (A) has erred in upholding the order of the Assessing Officer in making disallowance u/s 40(a)(ia) of the Income Tax Act for nondeduction of TDS u/s 195 by rejecting the contention of the assessee that payments for purchase of software, with prejudice to Ground No 1, may get covered under royalty only by insertion of Explanation 4 of section 9(1)(vi).

3. CIT(A) has placed reliance on Karnataka HC decision in the case of Synopsis International and other cases and has erred in not passing a speaking order as to why the reasons stated by the Appellant differentiating the said decision was not applicable or not being considered.

4. The appellant reserves the right to add additional grounds to, or elaborate on the above grounds during the appeal hearing as long as it is in relation to the above subject matter under dispute.

3. On 05.10.2020, learned AR of the assessee has filed additional written submissions and also raised the following additional ground:-

"Ground No.5: The Learned CIT(A) has erred in passing the appellate order and has consider the appellant as a purchaser of software without appreciating the fact that the appellant is an intermediary of product not having any right over the software and the payment made by the intermediary is only payment made after retaining the intermediary margin and not for purchase of software".

4. We find that this additional ground is not signed by the assessee but it is signed by the learned AR of the assessee only and moreover, it is seen that this ground is nothing but an additional argument in support of the grounds already raised and therefore, we hold that it is not admissible as an additional ground but we will consider it as an argument while deciding the main grounds raised by the assessee.