2015 (10) TMI 379

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....e only issue arises for consideration is disallowance u/s 40(a)(ia) of the Act for non deduction of tax u/s 194J of the Act. 3. Shri CBM Warrier, the ld.representative for the assssee submitted that the assessee is a co-operative society engaged itself in printing and publication of books for the students. According to the ld.representative, the assessing officer found that what was paid by the assessee to the authors of the book is royalty and, therefore, the assessee has to deduct tax u/s 194J. Referring to provisions of section 194J of the Act, the ld.representative submitted that Explanation (ba) to section 194J clearly says that the term "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of s....

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....s defined in section 9(1)(vi) of the Act. Therefore, according to the ld.DR, the CIT(A) has rightly confirmed the addition. 5. We have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the assessee paid exceeding Rs. 20,000 to the authors of the book without deducting tax. The business of the assessee is printing and publication of books for the students. 6. We have carefully gone through the provisions of section 9(1)(vi) which reads as follows: "9(1) The following incomes shall be deemed to accrue or arise in India:- (i) To (v)(c) xxxxxxxxxxxxxxx (vi) income by way of royalty payable by - (a) The Government; or (b) By a person who is a resident....

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.... a computer or computer-based equipment under any scheme approved under the Policy on Computer Software Export, Software Development and Training, 1986 of the Government of India. Explanation 1.- For the purposes of the first proviso, an agreement made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date; so, however, that, where the recipient of the income by way of royalty is a foreign company, the agreement shall not be deemed to have been made before that date unless, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on ....

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....ts referred in section 44BB; (v) The transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or (vi) The rendering of any services in connection with the activities referred to in sub-clauses (i) to (iv), (iva) and (v). Explanation 3. - For the purposes of this clause, "computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any....