The ITAT dismissed the revenue's appeals, holding that receipts...

The ITAT dismissed the revenue's appeals, holding that receipts by a non-resident US corporate assessee from supply of end-user software licenses and related services do not constitute "royalty" taxable under the India-USA DTAA. The Tribunal found the license restricted copying, distribution, sublicensing, rent, source-code access and modification, and did not effect a transfer of copyright. The First Appellate Authority's detailed factual and legal analysis - applying the controlling Supreme Court ratio on software licensing and copyright transfer - was upheld as unassailed by any material demonstrating transfer of copyright. Consequently, the impugned demand was not sustained and the revenue's appeals were dismissed.