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TMI Blog2023 (6) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and submissions made in regard to addition made by the Ld. AO by treating the payments made for purchases of Rs. 10,51,32,369 for copyrighted articles as royalty and confirming the addition made by Ld. AO which is highly arbitrary, unjustified, uncalled for and bad in law. 2. The Ld. CIT(A) has erred in law and facts of the case in confirming the order of the Assessing Officer treating the payment made by the assessee for off the shelf copyrighted product as royalty rejecting the detailed submission of the assessee without specifying the reasons for disagreement to the decision of the jurisdictional high courts which is arbitrary, bad in late and against the principal of natural justice. 3. The Ld. CIT(A) has also erred in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pore it can be seen that the phrase used in "any such right, property or information The Explanation 4 provides that the transfer of all or any rights in respect of any right property or information includes and has always included transfer of all or any night for use or right to use a computer software (including granting of a license) irrespective of the medium through which such right is transferred. This clearly provides that "right for use or right to use a computer software" is covered under the definition of royalty under India Singapore DTAT as well in view the above discussion, the TDS had to be deducted on the expense payment in the nature of Royalty as per Article 12 of India Singapore DTAA 1. Total amount of expense on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue. 9. The ld. DR fairly conceded to this. 10. We have carefully considered the orders of the authorities below. It is a fact that the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence [supra] has settled the dispute in favour of the assessee and against the Revenue. The Hon'ble Supreme Court has grouped four categories while deciding the appeal as under: (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.3 (ii) The second category of cases deals with resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f), 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 to in section 195 of the Income-tax Act were not liable to deduct any TDS under section 195 of the Income-tax Act. The answer to this question will apply to al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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