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TMI Blog2022 (12) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... neering Analysis Center of Excellence Pvt Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] was pleased to hold that the impugned receipts were not in the nature of royalty . Thus, the view taken by Hon ble ITAT, Delhi is quite clear that the impugned receipts were not in the nature of royalty . This view equally applies to the present assessee. For the sake of completeness and clarity, we may mention that the decision of ITAT, Delhi was in the matter of recipient i.e. M/s The Chancellor, Masters and Scholars of the University of Cambridge and the present-appeal before us is in the matter of payer. But that would not make any difference in the conclusion qua the nature of receipt/payment. Hence respectfully following the decision of Hon ble IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such that the assessee is a society running an educational institution. It is also an authorized centre for conducting courses of Cambridge International Examination run by University of Cambridge, U.K. It remitted a payment of Rs. 24,33,853/- in terms of Agreement dated 10.05.2010 with M/s The Chancellor, Masters and Scholars of the University of Cambridge (Page No. 7 of the assessment-order) without deducting tax at source (TDS). Ld. AO framed a view that the impugned payment was in the nature of Royalty as per Explanation 2(iii) and 2(vi) of section 9(1)(vi) read with Explanation to section 9(2) of the Income-tax Act, 1961 as well as in accordance with Article 13 of Double Taxation Avoidance Agreement (DTAA) between India and U.K. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 3. The common grievance is that the ld. CIT(A) was not justified in holding that the revenue received by the assessee on account of granting various licences is not taxable as Royalty Income and so also the amount received for conducting research activities, which are in the nature of various rights transferred by the assessee to its Indian customers for commercial use. 4. Briefly stated, the facts of the case are that the assessee is an internationally renowned university engaged in research, the provision of education, publishing and the provision of examination services. During the year under consideration, it undertook these activities through three divisions. The three divisions are: (i) The University itself which u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO but could not bring any distinguishing decision in favour of the revenue. 11. We have given thoughtful consideration to the orders of the authorities below. In our considered opinion, as per section 90 subsection (2) of the Act, where India has executed a tax treaty, then, the non-resident assessee has the option of being taxed under the tax treaty to the extent its provisions are more beneficial and based upon provisions of India-UK DTAA, we have to consider the treatment given by the Assessing Officer in light of the relevant Article of India-UK DTAA. 12. Article 13(3) of India-UK DTAA, Royalty has been defined as: a) payments of any kind received as a consideration for the use of, or the right to use, any copyr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to the use of or right to use any copyright. The provisions contained in the Income-tax Act (section 9(l)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. 169. Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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