2021 (7) TMI 1336 - SCH - Income Tax

Income deemed to accrue or arise in India - Taxability of amount received - PE in India - Indo-China DTAA - whether payments made by the assessee s customers to it constituted royalty in respect of software supplied? - as decided by HC 2019 (10) TMI 1508 - DELHI HIGH COURT supplies made (of the software) enabled the use of the hardware sold. It was not disputed that without the software hardware use was not possible. The mere fact that separate invoicing was done for purchase and other transactions did not imply that it was royalty payment. In such cases the nomenclature (of license or some other fee) is indeterminate of the true nature. Nor is the circumstance that updates of the software are routinely given to the assessee s customers. These facts do not detract from the nature of the transaction which was supply of software in the nature of articles or goods. This court is also not persuaded with the submission that the payments if not royalty amounted to payments for the use of machinery or equipment. Such a submission was never advanced before any of the lower tax authorities; HELD THAT - We find no ground to interfere with the impugned order(s) passed by the High Court. The Special Leave Petitions are accordingly dismissed.

Summary

The Supreme Court of India dismissed the Special Leave Petitions and found no grounds to interfere with the impugned order(s) passed by the High Court. Delay was condoned, and any pending interlocutory application(s) were disposed of.