https://www.taxtmi.com/caselaws?id=757730 Delhi HC held that denial of tax withholding certificate u/s 197 was improper where competent authority failed to consider chargeability aspects as statutorily mandated under Rule 28AA(2). Court ruled that supply/licensing of computer software to associated entities did not constitute royalty under Income Tax Act or India-US DTAA, as no copyright transfer occurred - only usage rights were granted. Authority erred in relying on draft assessment order which is inchoate and non-conclusive. Following Engineering Analysis Centre SC precedent, payments for software usage rights without proprietary interest transfer cannot be termed royalty. Writ petitions allowed, impugned orders quashed, nil withholding certificate application to be re-examined. en-us Mon, 19 Feb 2024 00:00:00 +0530 Fri, 30 Aug 2024 16:25:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=757730 Delhi HC held that denial of tax withholding certificate u/s 197 was improper where competent authority failed to consider chargeability aspects as statutorily mandated under Rule 28AA(2). Court ruled that supply/licensing of computer software to associated entities did not constitute royalty under Income Tax Act or India-US DTAA, as no copyright transfer occurred - only usage rights were granted. Authority erred in relying on draft assessment order which is inchoate and non-conclusive. Following Engineering Analysis Centre SC precedent, payments for software usage rights without proprietary interest transfer cannot be termed royalty. Writ petitions allowed, impugned orders quashed, nil withholding certificate application to be re-examined. Case-Laws Income Tax Mon, 19 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=757730