2022 (2) TMI 820

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....d substance of the grievance of the assessee is that the Assessing Officer/DRP erred in holding that the payments received by the assessee on sale of software to India resellers/distributors is in the nature of 'Royalty' chargeable to tax u/s 9(1)(vi) of the Act and under Article 12 of the India - USA Double Taxation Avoidance Agreement [DTAA]. 3. Representatives were heard at length. Case records carefully perused. 4. Briefly stated, the facts of the case are that the appellant is engaged in the business of developing, manufacturing and distribution of software products and has entered into international distributor/reseller agreements in India for supplying software products and maintenance support services to the end customers in I....

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....on for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or information concerning industrial, commercial or scientific experience, including gains derived from the alienation of any such right or property which are contingent on the productivity, use, or disposition thereof; and (b) payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial, or scientific equipment, other than payments derived by an enterprise described in paragraph 1 of Article 8 (Shipping and Air Transport) from activities described in paragraph 2(c) or 3 of Article 8. " 10. A perusal of the above shows that the term 'Royalty' me....

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....e of assessee's trademark. 12. A careful perusal of the agreement entered into by the assessee with the resellers in India and keeping in mind the aforementioned specific clauses, in our considered opinion, it is clear that such agreements are entered into solely for the sale of software products and not in any way entail transfer of patent, copy right or any other intellectual property right. 13. On the above factual matrix, in our consider opinion, the quarrel is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Supreme Court in a land mark judgment in the case of Engineering Analysis Center of Excellence Pvt Ltd. [2021] 432 ITR 471 has laid down the following: "Given the ....