9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 882 - AT - Income TaxTDS u/s 195 - Receipt of sale of software licenses as Royalty - Addition in accordance with the provisions of section 9(1)(vi) and Article 12 of the DTAA between India and Singapore - HELD THAT - We are of the considered view that the impugned quarrel is now well settled by the decision in favour of the assessee and against the Revenue in the case of Engineering Analysis Center of Excellence Pvt 2021 (3) TMI 138 - SUPREME COURT - we direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee.
Issues:
Assessment of receipt of sale of software licenses as 'Royalty' under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the DTAA between India and Singapore. Analysis: The appeal was filed against the order of the ld. CIT(A) assessing the receipt of sale of software licenses as 'Royalty' under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the DTAA between India and Singapore for Assessment Year 2016-17. The Assessing Officer found that the assessee had received an amount from the sale and maintenance services of software license but did not offer it for tax. The assessee contended that the income was not taxable in India based on the India-USA DTAA. The Assessing Officer, however, applied Explanation 2 to section 9(1)(vi) of the Act and taxed the receipts as royalty, dismissing the assessee's submissions and judicial decisions. The matter was taken to the ld. CIT(A) but was unsuccessful. The Tribunal referred to the decision of the Hon'ble Supreme Court in the case of Engineering Analysis Center of Excellence Pvt Ltd., where it was held that payments made by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers for the resale/use of computer software through EULAs/distribution agreements did not amount to payment of royalty for the use of copyright in the software. As a result, such payments did not give rise to any income taxable in India. The Tribunal, following this decision, directed the Assessing Officer to delete the addition made, allowing the appeal of the assessee in ITA No. 9428/DEL/2019. Therefore, based on the Supreme Court's decision, the Tribunal ruled in favor of the assessee, stating that the receipts from the sale of software licenses were not taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the DTAA between India and Singapore.
|
