2021 (9) TMI 807

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....ng to the conclusion that on the remittances of Rs. 3185523/- made by the assessee TDS u/s 195 should have been deducted. As according to him the remittances to M/s TUKATECH INC, E. SLAUSON, AVENUE U.S.A, LOS ANGLES, CA 90040, U.S.A for supply of software which is his income as per both Section 9(1)(VI) and as per Article 12(3) of India with U.S.A DTAA. 3. The assessee is a Private Limited Company. The assessee is engaged in the business of manufacturing of export of Readymade Garments and during the year, the assessee remitted $59650 equivalent to Rs. 31,85,523/- to M/s Tukatech Inc, E. Slauson, Avenue USA, Los Angeles, CA 90040, U.S.A for the purpose of Software vide Invoice Number 208364 and the amount was remitted through normal bank....

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....61, but the Assessing Officer held that the receipt of M/S TUKATECH INC from supply of software are taxable in India as royalty income both under section 9(1)(vi) of the Act and under Article 12(3) of India-USA DTAA and thus taxed under Section 195(1) which was required to be deducted. Thus, the Assessing Officer created demand with interest amounting to Rs. 7,64,542. The CIT (A) upheld the order of Assessing Officer and held that through purchase of software, the assessee had acquired copy right. Therefore, the CIT(A) relied upon the decision of Hon'ble High Court of Karnataka in case of CIT Vs Samsung Electronics Co. Ltd. 345 ITR 494, wherein it is held that royalty is taxable both under the domestic law as well under Article 12(3) of the....