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TMI Blog2021 (4) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... llence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] wherein as held given the definition of royalties contained in Article 12 of the DTAAs it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9 (1)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessee, have no application in the facts of these cases. Our answer to the question posed before us, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)Is not the finding of the Tribunal bad especially as per Explanation (iv) was introduced by Finance Act, 2012 with retrospective effect from 01.04.1976 clearly provided that all types of transactions in software amounted to royalty for the purpose of Section 9(1)(vi) of the Income Tax Act and therefore taxable? 3)Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the disallowance made under Section 40(a)(ia) for non deduction of tax at source on payments effected by the assessee is not taxable under Section 9(1)(vi) of the Income Tax Act? 3.The appeal in T.C.A.No.1065 of 2015 was admitted on the following substantial questions of law: 1)Whether on the facts and in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excellence Private Limited v. Commissioner of Income Tax and Another], wherein the Hon'ble Supreme Court held as follows: ............... 4. The appeals before us may be grouped into four categories: i) The first category deals with cases in which computer software is purchased directly by an end-user, resident in India, from a foreign, non-resident supplier or manufacturer. ii) The second category of cases deals with resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, nonresident suppliers or manufacturers and then reselling the same to resident Indian end-users. iii) The third category concerns cases wherein the distributor happens to be a foreign, non-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself appreciated the difference between the payment of royalty and the supply/use of computer software in the form of goods, which is then treated as business income of the assessee taxable in India if it has a PE in India. CONCLUSION 172. Given the definition of royalties contained in Article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Hon'ble Supreme Court, it is clear that the substantial questions of law, which are raised in the present appeals, were already decided by the Hon'ble Supreme Court against the revenue. 8.Following the ratio laid down by the Hon'ble Supreme Court in the judgment reported in 2021 SCC OnLine SC 159 [cited supra] , this Court, in the appeals in T.C.A.Nos.758 of 2013 [The Commissioner of Income Tax, Chennai Vs. M/s. Dasault Systems Sumulia Pvt. Ltd., 10th Floor, ASV N Ramana Tower, 37 38 Venkatnarayana Road, T. Nagar, Chennai - 600 017] and T.C.A.No.443 of 2017 [The Commissioner of Income Tax, Chennai Vs. M/s. Dasault Systems Sumulia Pvt. Ltd., (Formerly known as ABAQUS INC), Rising Sun Mills, 166, Vally Street ..... X X X X Extracts X X X X X X X X Extracts X X X X
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