2012 (3) TMI 45

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.... informatics software and services company for life sciences, chemical and material research & development. The applicant enables the customers to accelerate their research process to enable them to rapidly discover new therapeutics materials and compounds and to introduce new efficiencies into the process that drive lower cost. The applicant has vast portfolio of copyrighted computer aided design modeling and stimulation offerings which assist customers in conducting scientific experiments in order to reduce the duration and cost of discovering and developing new drugs and materials. The company's platform can be used by customers to mine aggregate, analyze and report scientific data from disparate sources thereby better utilizing scientif....

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....The applicant contends that the company is authorizing an end user to have benefit of data or modules of the copyrighted software on a non-exclusive and non-transferable basis by granting license and since any transfer of rights on a copyrighted software would be business income and not royalty received from the independent reseller or customers under Article 12 of the Double Taxation Avoidance Agreement between India and Japan. The income being business income, Article 7 of the Convention would be attracted and since the applicant does not have a Permanent Establishment (PE) in India, the amount realized is not taxable in India. It is in this context that the applicant approached this Authority for an advance ruling. By order dated 25.8.20....

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....the contention is that what is paid by the reseller to the applicant and by the end-user customer to the applicant is royalty as defined in the act and as defined in the DTAC between India and Japan. It does not appear to be necessary to further detail the submission made by the revenue since we find that the questions posed for our ruling have already been answered in three other rulings of this Authority.   5. Learned counsel for the applicant relied on the ruling of this Authority in Dassault Systems KK in re. (AAR/821 of 2009) to contend in that ruling also what was involved was a resale of copyrighted articles and this Authority had ruled that the payment was not royalty and that the payment cannot be taxed as business profits in....