IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH - ITAT
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH - ITAT IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH - ITAT
8iv) The assessee cannot provide access to the software to any one, otherthan assessee’s employees, contractors or consultants under a writtencontract by which all of them would be bound by the terms and conditions asare applicable to the assessee on purchase of software.v) The assessee cannot sell license, distribute, pledge, lease, rent orcommercially share (including timeshare) the above software or any rightstherein.vi) The assessee cannot use the software for purposes of providing aservice bureau, including without limitation, for providing third partyhosting or third party application, integration or application service provideror any other similar service.vii) The assessee cannot modify, translate, reverse engineer, decrypt,decompile, disassemble, create directive works based on, or otherwiseattempt to discover the above mentioned software source code or underlyingideas or algorithms.9. Another important fact is that, the software has been supplied to theassessee on computer disk from outside India on FOB basis. The non-residentcompanies/parties, from whom the assessee has obtained the software, do not havea Permanent Establishment in India. The first appellate authority extracted theoperative part of the license agreement at para 2.3 page 9 and 10 of her order inAppeal No.CIT(A)-XXXI/DDIT(IT)2(1)IT-303/02-03/07-08 dated 29-10-2007which is extracted for ready reference as these would demonstrate the generalterms and conditions, which have been summarized in para 8 above :
9“1. License……….Capitalized terms used herein shall have the meaning set forth on the CoverPages and as set forth herein, including the last section hereof entitled“Definitions”. TIBCO hereby grants Licenses a non-exclusive, perpetual,irrevocable (except in the event of a material breach of the Agreement),royalty free, worldwide license to use the number of copies of TIBCOSoftware set forth on the Cover Pages at Licensee’s premises, solely forLicensee’s own internal operations, including use of the TIBCO Software asits backend infrastructure for application service provider services (“ASPServices”) and Web Housing services, where the TIBCO Software is notdirectly accessible to any third party utilizing the ASP Services and WebHousing provided, however, that in no event may Licensee use the TIBCOSoftware for purposes of providing ASP Services on behalf of a third party.No right to use, copy, duplicate or display the TIBCO Software is granted,except as expressly provided herein.2. Limits…………….Licensee agrees not to (directly or indirectly, and in whole or in part): (a)make more copies of the TIBCO Software than the number of copies, exceptfor a reasonable number of copies for backup and archival purposes; (b)provide access to the TIBCO Software to anyone other than Licensee’semployees, contractors, or consultants under written contract with Licenseeagreeing to be bound by terms at least as protective of TIBCO as those inthis Agreement (“Authorized Users”; (c) sublicense, distribute pledge, lease,rent, or commercially share (including timeshare) the TIBCO Software orany of Licensee’s rights herein;(d) except as provided in Section 1 above,use the TIBCO Software for purposes of providing a service bureau,including without limitation, providing third party hosting, or third-partyapplication integration or application service provider type services, or forany similar services; (e) use the TIBCO Software in connection with anyultra-hazardous activity, or any other activity for which its failure mightresult in serious property damage, or death or serious bodily injury; or (f)modify, translate, reverse engineer, decrypt, decompile, disassemble, cratederivative works based on, or otherwise attempt to discover the TIBCOSoftware source code or underlying ideas or algorithms.
- Page 5: 54. Aggrieved, the Revenue is in ap
- Page 10: 103. Limited WarrantiesTIBCO warran
- Page 13 and 14: 13(i) to reproduce the work in any
- Page 15 and 16: 15It is clear from the above defini
- Page 17 and 18: 17The tests laid down in para 168 o
- Page 19 and 20: 19copyright, does not amount to use
- Page 21: 2114. In the result, all the appeal
8iv) The assessee cannot provide access to the software to any one, otherthan assessee’s employees, contractors or consultants under a writtencontract by which all of them would be bound by the terms and conditions asare applicable to the assessee on purchase of software.v) The assessee cannot sell license, distribute, pledge, lease, rent orcommercially share (including timeshare) the above software or any rightstherein.vi) The assessee cannot use the software for purposes of providing aservice bureau, including without limitation, for providing third partyhosting or third party application, integration or application service provideror any other similar service.vii) The assessee cannot modify, translate, reverse engineer, decrypt,decompile, disassemble, create directive works based on, or otherwiseattempt to discover the above mentioned software source code or underlyingideas or algorithms.9. Another important fact is that, the software has been supplied to theassessee on computer disk from outside India on FOB basis. The non-residentcompanies/parties, from whom the assessee has obtained the software, do not havea Permanent Establishment in India. The first appellate authority extracted theoperative part of the license agreement at para 2.3 page 9 and 10 of her order inAppeal No.CIT(A)-XXXI/DDIT(IT)2(1)IT-303/02-03/07-08 dated 29-10-2007which is extracted for ready reference as these would demonstrate the generalterms and conditions, which have been summarized in para 8 above :
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