Assessee entered into two agreements with GTRC, Georgia, USA for a collaborative joint research project to study permeability of tight gas sandstone and made certain payments to Georgia Tech Research Corporation (GTRC) for conducting study related to research project 'Permeability Characterization and Modeling of Tight Sandstone Reservoirs'. The AO took of the view that payment made to GTRC was in the nature of royalty and, hence. TDS was called for under section 195. Held: Assessee had demonstrated from the copies of agreement and copies of invoices that payments to GTRC was not in the nature of royalty but was in the nature of cost reimbursement from a joint research project on which both the parties had equal right to use. AO had also not specifically controverted the related material referred to by assessee and, therefore, payment made to GTRC could not be treated as royalty and therefore, no TDS was called for.
IN THE ITAT, AHMEDABAD BENCH
RAJPAL YADAV, V.P. & AMARJIT SINGH, A.M.
Pandit Deendayal Petroleum University-PDPU v. ITO
I.T.A. Nos. 3268 & 3269/Ahd/2016
5 April, 2021
Assessee by: S.N. Soparkar, Sr. A.R. and Parin Shah, A.R.
Revenue by: Rajdeep Singh, Sr. D.R.
Amarjit Singh, A.M.
These two appeals filed by assessee for assessment year 2012-13 & 2013-14, arise from order of the Commissioner (Appeals)-13, Ahmedabad dated 15-9-2016, in proceedings under section 201 and 201(1A) read with section 195 of the Income Tax Act, 1961; in short 'the Act'.
2. Since similar facts and issues are involved in the aforesaid two appeals of the assessee, therefore, for the sake of conveniences, we take the ITA No. 3268/Ahd/2016 for assessment year 2012-13 as a lead case for adjudication and its finding would be applicable to the other appeal filed vide ITA No. 3269/Ahd/2016 for assessment year 2013-14. The main issue contested in the ground of appeal against the decision of learned Commissioner (Appeals) that assessee is liable for deduction of tax under section 195 of the Act on payment made to Georgia Tech Research Corporation towards cost reimbursement for joint Research Projects as Royalty and levy of interest of Rs. 2,31,307 under section 201(1A) of the Act and liable to deduction of tax TDS amounting to Rs. 5,58,040 on payments made to Georgia Tech Research Corporation.