2021 (9) TMI 27

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....the amounts received by the assessee on account of sale of software and other incidental receipts would constitute royalty within the meaning of section 9(1)(vi) of the I.T. Act and Article 12 of the DTAA between India and Australia. 3. The brief facts of the case are as follow: The assessee is a foreign company. It is engaged in the business of development and licencing of software products. During the relevant assessment year, it had sold software to various Indian customers. It was noticed by the Department that the amounts received by assessee for the sale of software/licences is in the nature of royalty in view of the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Samsung Electronics Limited rep....

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....ned in section 9(1)(vi) of the I.T. Act and Article 12 of the DTAA between India and Australia. The AO also placed reliance on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Samsung Electronics Limited (supra). 5. Assessee filed objections before the DRP. The DRP vide its order dated 08.02.2019 confirmed the view of the A.O. in the draft assessment order. Consequent to the DRP's direction, the final assessment order was passed on 01.03.2019. 6. Aggrieved by the final assessment order, the assessee has filed the present appeal before the Tribunal. The learned AR submitted that the issue in question is squarely covered in favour of the assessee by the judgment of the Hon'ble Apex Court in the cas....

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....dering the end-users agreement, categorically held that in all the above four situations that sale of software would not constitute royalty within the provisions of section 9(1)(vi) of the I.T. Act and Article 12 of the treaty. In the instant case, the assessee is a foreign company, which sells software licences to the end- users in India. Therefore, this case falls within the first category grouped by the Hon'ble Apex Court. The Assessing Officer in this case had elaborately examined the end-users licence agreement entered between the assessee and the Indian customers. The relevant portion of the end-users licence agreement considered by the A.O. in the final assessment order are extracted from pages 16 to 18 of the assessment order, h....