TaxTMI 
TaxTMI 
2024 (7) TMI 227
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....P. C. Tripathi and Mr. Ketan Dave i/b. A.S. Dayal & Associates in ITXA 1827/18, 1828/18 and 1851/18. ORAL JUDGMENT (PER G. S. KULKARNI, J.): 1. We have heard learned counsel for the parties. 2. These appeals involve common question of law as raised by the revenue. Learned counsel for the parties are ad idem that the issue of law as raised, namely whether the payments made by the assessee to a foreign resident, for obtaining computer software are liable to be taxed in India as "royalties" under the provisions of Section 9 (1) (vi) of the Income Tax Act, 1961, would stand answered in view of the decision of the Supreme Court in Engineering Analysis Centre of Excellence (P.) Ltd. vs. Commissioner of Income Tax [2021] 125 taxmann.co....
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....yalty" under the provisions of Section 9 (1) (vi) of the Income Tax Act, 1961 ("the Act") or would it be a business income of the recipient companies. 4. In its application as filed under Section 195 (2) of the Act the assessee raised contentions as to why remittance made to such foreign parties was not liable to be taxed as "royalty", under the provisions of Section 9 (1) (vi) of the Act. Such application of the assessee was rejected by an order dated 14th September, 2003 passed by the Deputy Director of Income Tax (International Tax). The assessee carried the matter in appeal before the CIT(A). The appeals filed by the assessee were allowed by the CIT(A), against which at the behest of the Revenue the proceedings reached the Trib....
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....view of the authoritative pronouncement of the Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd. vs. Commissioner of Income Tax. In the said case the Assessing Officer, applying Article 12 (3) of the DTAA entered between India and U.S.A. as also the provisions of Section 9 (1) (vi) of the IT Act, to the transaction between the parties, held that the transaction involved copyright, which attracted the payment of royalty and accordingly, tax was required to be deducted at source by the Indian importer. Since this was not done, it was held that the assessee was liable to make good the payment of TDS which it had not deducted. Also interest under Section 201 (1) (A) of the Act was levied. The Appeal before the Com....
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....ere was no obligation on the persons mentioned in Section 195 (1) of the Act to deduct tax at source as the distribution agreements, in the facts of the case did not create any interest or right in such distributors/end users, which amounted to the use or right to use any copyright. It was held that the provisions of Section 9 (1) (vi) of the Act along with Explanation 2 and 4 thereof which dealt with royalty, not being more beneficial to the assessee, had no application in the facts of the case. It would be appropriate to extract the conclusion as rendered by the Supreme Court in which reads thus:- "168. Given the definition of royalties contained in Article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear t....