TaxTMI 
TaxTMI 
2023 (9) TMI 145
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....mount received by the assessee from sale/distribution of software is not royalty within the meaning of Article 12(3) of India - Singapore Double Taxation Avoidance Agreement (DTAA). 3. Briefly the facts are, the assessee is a non resident corporate entity incorporated under the laws of Singapore and a tax resident of Singapore. For the assessment year under dispute assessee filed its return of income on 31.03.2018 declaring total income of Rs. 1,56,50,870/-. As observed by the Assessing Officer, the assessee is engaged in the business of providing end to end software and cloud technology solution to its clients. In the year under consideration the assessee entered into certain transactions in India and earned revenue as under: 1. Fees f....
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....the context of facts and materials available on record and following the ratio laid down by the Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT (2021) 125 taxman.com 42 (SC). Learned Commissioner (Appeals) ultimately accepted assessee's claim that the revenue earned by the assessee is in the nature of sale of a copyrighted article and not for transferring the right to use any copyright. Thus, he held that the amount received is not in the nature of royalty but in the nature of business income and in absence of a Permanent Establishment (PE) is not taxable in India. 6. Before us, learned Departmental Representative strongly relied upon the observations of the Assessing Officer and submitted that ....
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....s/sellers and re-sales them to distributors/end users in India. She submitted, when the assessee itself does not have any right in the copyright and purchases from another party for re-sale, how can it transfer such non-existent right to others? Thus, she submitted, assessee's case is squarely covered by the decision of the Hon'ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT (supra). Further, she submitted the decision of the Tribunal in case of Microsoft Corporation (supra) relied upon by the Revenue could be of no help as in an appeal preferred by the said assessee the Hon'ble Delhi High Court has accepted assessee's claim and reversed the decision of the Tribunal. 9. We have considered rival subm....
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....re can be considered to be in the nature of royalty. The Hon'ble Supreme Court had segregated the transactions relating to the sale of software to following four categories: i) "The first category deals with cases in which computer software is purchased directly by an end-user, resident in India, from a foreign, non-resident supplier or manufacturer. ii) The second category of cases deals with resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non-resident suppliers or manufacturers and then reselling the same to resident Indian end-users. iii) The third category concerns cases wherein the distributors happens to be a foreign, non-resident vendor, who, after purchasing softwa....