2022 (10) TMI 450

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....common grievance is involved in both the appeals, they were heard together and are disposed of by this common order for the sake convenience and brevity. 3. The common grievance is that the ld. CIT(A) was not justified in holding that the revenue received by the assessee on account of granting various licences is not taxable as 'Royalty Income' and so also the amount received for conducting research activities, which are in the nature of various rights transferred by the assessee to its Indian customers for commercial use. 4. Briefly stated, the facts of the case are that the assessee is an internationally renowned university engaged in research, the provision of education, publishing and the provision of examination services. During the ....

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....ot provided any basis for taxability of receipts as royalty. 10. Before us, ld. DR strongly supported the findings of the AO but could not bring any distinguishing decision in favour of the revenue. 11. We have given thoughtful consideration to the orders of the authorities below. In our considered opinion, as per section 90 subsection (2) of the Act, where India has executed a tax treaty, then, the non-resident assessee has the option of being taxed under the tax treaty to the extent its provisions are more beneficial and based upon provisions of India-UK DTAA, we have to consider the treatment given by the Assessing Officer in light of the relevant Article of India-UK DTAA. 12. Article 13(3)of India-UK DTAA, Royalty has been defined as....

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.... these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income-tax Act (section 9(l)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. 169 Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does....