Software maintenance payments not treated as royalty or technical services, so no TDS disallowance survived.

Payments for software maintenance were held not to constitute royalty or fees for technical services where earlier ITAT rulings in the assessee's own case had already covered the issue. On that basis, no tax deduction at source liability arose, and the disallowance under section 40(a)(ia) could not be sustained in the absence of any change in facts. The disallowance was deleted.

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Issues: Whether the disallowance made under section 40(a)(ia) for software maintenance charges was justified on the ground that the payment constituted fees for technical services or royalty and attracted tax deduction at source.

Analysis: The issue was covered by earlier decisions in the assessee's own case for other assessment years. The Tribunal followed those decisions and held that the payment for use of the software did not satisfy the conditions for royalty or fees for included services, and therefore no liability to deduct tax at source arose. In the absence of any change in facts, the disallowance under section 40(a)(ia) could not be sustained.

Conclusion: The disallowance was deleted and the Revenue's challenge failed.

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