AI Drafter 
TaxTMI 
TaxTMI 
2021 (8) TMI 1370
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.... the grounds urged by the assessee are directed against the action of the A.O. in assessing the receipts by way of sale value of software and provision of ancillary support services as royalty receipts/FTS income. 2. The facts relating to the issue are stated in brief. The assessee is a company incorporated in the United States of America and it is stated that the assessee is engaged in the business of developing, manufacturing and distribution of software products from outside India and also providing ancillary support services from outside India. The assessee has entered into agreements with distributors/resellers/customers in India for supplying software products and providing ancillary support services. For the year under considerati....
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....ourt in the case of Samsung Electronics Company Ltd. (supra), which was relied upon by the AO, has since been reversed by Hon'ble Supreme Court in the case of Engineering Analysis Centre for Excellence Pvt. Ltd. (432 ITR 471). The Ld. A.R. further submitted that an identical issue was examined in the assessee's own case by the coordinate bench in assessment year 2016-17 and following decision rendered by Hon'ble Supreme Court in the case of Engineering Analysis Centre for Excellence Pvt. Ltd., the coordinate bench held that the receipts by way of sale of software licenses and provision of ancillary support services cannot be assessed as royalty income. 5. We heard Ld. D.R. who did not contradict the submission made by Ld. A.R. 6. We n....
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....er the charging provision contained in Section 9 read with Section 4 of the Income Tax Act, read with the DTAA. Thus, it is only when the non-resident is liable to pay income tax in India on income deemed to arise in India and no deduction of TDS is made under Section 195(1) of the Income Tax Act, or such person has, after applying Section 195(2) of the Income Tax Act, not deducted such proportion of tax as is required, that the consequences of a failure to deduct and pay, reflected in Section 201 of the Income Tax Act, follow, by virtue of which the resident-payee is deemed an "assessee in default", and thus, is made liable to pay tax, interest and penalty thereon. This position is also made amply clear by the referral order in the concern....
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....ndian distributor to reproduce the aforesaid book and then sell copies of the same. On the other hand, if an English publisher were to sell the same book to an Indian publisher, this time with the right to reproduce and make copies of the aforesaid book with the permission of the author it can be said that copyright in the book has been transferred by way of licence or otherwise, and what the Indian publisher will pay for, is the right to reproduce the book, which can then be characterized as royalty for the exclusive right to reproduce the book in the territory mentioned by the licence. 52. There can be no doubt as to the real nature of the transactions in the appeals before us. What is "licensed" by the foreign, nonresident supplier to th....
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....es not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 of the Income Tax Act. The answer to this question will apply to all four categories of cases enumerated by us in paragraph-4 of this judgment. 8. In the light of the aforesaid judgment delivered by the Hon'ble Supreme Court, the question of law framed in the present appeal is decided in favour of the assessee and against the revenue." 6. Further, the judgment relied on by the DRP in the case of Samsung Electronics (supra) was reversed by the Hon'ble Supreme Court in Civil Appeal No.8733-8734/2018 &Ors. in the case of Engineering Analysis Cent....