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The Tax Publishers Microsoft and Dell licences bought by parent and sub-licensed to Indian subsidiary - Taxability *Facts:* Assessee had paid software licences for Microsoft and Dell licences to its parent company in the USA. Revenue took a stand that these were royalties and attracted withholding tax and in the absence of the same disallowance of the expense was made deeming the assessee to be in default with levy of interest u/s 201(1)(IA). On appeal to ITAT - Held in favour of the assessee that the licences did not carry any income component besides sale of shrink wrap software was akin to sale of products thus was outside withholding tax obligations. *Applied:*Engineering Analysis Centre of Excellence Private Limited (TS-106-SC-2021) *Case:* S&P Capital IQ (India) (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 1663 (Hyd-Trib)

The Tax Publishers

Microsoft and Dell licences bought by parent and sub-licensed to Indian subsidiary - Taxability

Facts:

Assessee had paid software licences for Microsoft and Dell licences to its parent company in the USA. Revenue took a stand that these were royalties and attracted withholding tax and in the absence of the same disallowance of the expense was made deeming the assessee to be in default with levy of interest u/s 201(1)(IA). On appeal to ITAT -

Held in favour of the assessee that the licences did not carry any income component besides sale of shrink wrap software was akin to sale of products thus was outside withholding tax obligations.

Applied:Engineering Analysis Centre of Excellence Private Limited (TS-106-SC-2021)

Case: S&P Capital IQ (India) (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 1663 (Hyd-Trib)