Royalty characterisation under tax treaty and domestic law did not raise any substantial question of law.

Payments made to licensors were analysed under section 9(1)(vi) of the Income-tax Act and Article 12 of the Indo-Finland DTAA for royalty characterisation. The Tribunal had applied earlier binding decisions of the same High Court on similar payments, and that approach was consistent with the later precedent interpreting the same provision in the treaty context. On that basis, the Tribunal's view was treated as sound and no substantial question of law arose under section 260A; the Revenue's appeals therefore failed.

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Issues: Whether the amounts paid by the assessee to its licensors constituted royalty within the meaning of section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the Indo-Finland Double Taxation Avoidance Agreement, and whether the Revenue's appeals under section 260A of the Income-tax Act, 1961 gave rise to any substantial question of law.

Analysis: The Tribunal had followed earlier binding decisions of the same Court on the characterisation of similar payments. As the later precedent had already interpreted the same provision in the context of the same treaty, the Tribunal's view was consistent with settled law. In these circumstances, no substantial question of law arose for consideration, and the Tribunal's application of law was accepted as sound.

Conclusion: The payments were not held to raise any debatable question warranting interference, and the Revenue's appeals failed.

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