Royalty characterization under the Income-tax Act and DTAA was treated as covered by earlier precedent, leaving no substantial question of law.

The Karnataka HC treated the dispute over royalty characterization under Explanation 2 to Section 9(1)(vi) of the Income-tax Act and Article 12 of the applicable DTAA as already covered by an earlier decision on the same legal issue. On that basis, it held that no substantial question of law arose for consideration, and the assessee's appeals were dismissed.

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Issues: Whether the Tribunal was right in dismissing the assessee's appeals by relying on earlier decisions, and whether the payments received by the assessee constituted royalty under Explanation 2 to Section 9(1)(vi) of the Income-tax Act, 1961 and Article 12 of the applicable DTAA.

Analysis: The questions raised were treated as already covered by an earlier decision of the Court on the same legal issue. In that view, no substantial question of law was found to arise for consideration.

Conclusion: The appeals were dismissed and the assessee did not succeed.

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