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TMI Blog2017 (1) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... and sale of a product. Courts have consistently noted the difference between a transaction of sale of a 'copyrighted article' and one of 'copyright' itself. The provisions of section 9(1)(vi) as a whole, would stand attracted in the case of the latter and not the former. Explanations 4 and 7 relied by the authorities would thus have to be read and understood only in that context and cannot be expanded to bring within its fold transaction beyond the realm of the provision. The Tribunal has relied on the decision of the Division Bench of the Delhi High Court in the case of The Principal Commissioner of Income Tax-6 V. M.Tech India Pvt Ltd [2016 (1) TMI 812 - DELHI HIGH COURT ], which supports our view as above. It is brought to our not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -allowance was effected in terms of 40(a)(ia) of the Income Tax Act, 1961, [hereinafter referred to as the Act] by the Assessing Officer, on the ground that consideration for purchase was of the nature of Royalty and tax ought to have been deducted at source in accordance with the provisions of section 194J of the Act. [b] The Appeal of the Assessee before the Commissioner of Income Tax [Appeals] was rejected, confirming the order of assessment invoking the provisions of section 40(a)(ia) of the Act to the effect that the consideration paid would come within the ambit of the definition of 'Royalty' under Explanations 4 and 5 of section 9(1)(vi) of the Act. [c] The matter was further assailed in Appeal by the assessee befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement between the principal and the assessee company clearly mentions in clause 2 as to what the VAR is authorized to do. Clause 5 of the Confidentiality and Non-Disclosure Agreement excludes the following:- 1. Receiving Party [Assessee Company] acquires no rights or licenses in the intellectual property of AutoDesk including but not limited to Patents, Trademarks, Copyrights or Service marks under this agreements or through disclosures hereunder...... 2. AutoDesk hereby grants Receiving Party a non-exclusive, personal, limited, non-assignable, non-sub-licensable, ROYALTY-FREE license to use a single copy of any software provided at Receiving Party's principal office in a secure location, solely in connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buryer does not by itself amount to transfer of any right of exclusive user, so as to render the payment made therefor being regarded as 'royalty' . 6. Courts have consistently noted the difference between a transaction of sale of a 'copyrighted article' and one of 'copyright' itself. See Tata Consultancy Services Vs. State of Andhra Pradesh [2004] 271 ITR 401[SC] ; Sundwiger EMFG [2004] 266 ITR 110 ; Dassault Systems K.K., In Re, (2010) 229 CTR 125 [AAR] ; ISRO Satellite Centre [ISAC] , In Re [2008] 307 ITR 59 [AAR] ; and Asia Satellite Telecommunications Co. Vs. DIT [2011] 332 ITR 340 [Delhi]. 7. The provisions of section 9(1)(vi) as a whole, would stand attracted in the case of the latter and not the form ..... X X X X Extracts X X X X X X X X Extracts X X X X
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