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TMI Blog2024 (7) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... Y HIGH COURT] wherein this Court, considering the position in law as laid down in Engineering Analysis Centre of Excellence (P.) Ltd. [ 2021 (3) TMI 138 - SUPREME COURT] and other decisions, dismissed the revenue s appeals inter alia observing that the question of law would stand squarely covered by such decision of the Supreme Court as onsidering the provisions of DTAA, there was no obligation on the persons mentioned in Section 195 (1) of the Act to deduct tax at source as the distribution agreements, in the facts of the case did not create any interest or right in such distributors/end users, which amounted to the use or right to use any copyright. It was held that the provisions of Section 9 (1) (vi) of the Act along with Explanation 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalysis Centre of Excellence (P.) Ltd. (supra) and other decisions, dismissed the revenue s appeals inter alia observing that the question of law would stand squarely covered by such decision of the Supreme Court. The said order is required to be noted which read thus:- 1. We have heard Mr. Suresh Kumar, Learned Counsel for the Appellant-Revenue and Mr. M. Agarwal, Learned Counsel for the Respondent. 2. At the outset, Mr. Suresh Kumar has stated that the Revenue would not have any objection for this Bench taking up the proceedings. 3. This Appeal of the Revenue assails an order dated 14th July, 2017 passed by Income Tax Appellate Tribunal ( Tribunal ), whereby a batch of appeals filed by the Revenue against the orders passed by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs passed by the Tribunal. 7. The Tribunal considering the provisions of the IT Act, as also the position in law as laid down in various decisions has observed that the assessee had made purchases of computer software from the residents of Denmark and Finland. It was observed that such purchases would fall within the provisions of the Double Taxation Avoidance Agreement ( DTAA ) entered between India and these countries. The Tribunal also observed that a co-ordinate Bench of the Tribunal in the assessee s own case in ITAS No. 2529/Mum/2008 and ITAS No. 4587/Mum/ 2010 had held that in such cases similar remittances made to the residents of Germany and France, were held to be not liable for deduction of tax at source. The Tribunal, following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what was sold by way of computer software, including the right or interest in copyright, which gave rise to the payment of royalty, would be an income deemed to have accrued in India under Section 9 (1) (vi) requiring deduction of tax at source. The orders passed by the High Court were assailed before the Supreme Court. It is also required to be noted that similar issues had arisen before the Delhi High Court inter alia in the case of DIT vs. Ericson A.B. and DIT vs. Nokia Network . The Delhi High Court however took a view contrary to the view taken by the High Court of Karnataka. The Supreme Court examined the issues as arising from the decisions of both the High Courts in the case of Engineering Analysis Centre of Excellence (P.) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 all four categories of cases enumerated by us in paragraph 4 of this judgment. 170 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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