The Tax Publishers2019 TaxPub(DT) 5494 (Pune-Trib)

INCOME TAX ACT, 1961

Section 194J

Legislature by way of insertion of Expln. 4 read with Expln. 2 to section 9(1)(vi) has made it clear beyond an iota of doubt that consideration for sue or right to use computer software in any form, including mere granting of licence, would be considered under the Act as income from royalty in the hands of recipient and the amendment being declaratory in nature was applicable during the year under consideration. Accordingly, AO was justified in making disallowance for want of TDS.

Tax deduction at source - Under section 194J - Royalty - Payment of annual licence fee for renewal of software licence

Assessee claimed deduction of Rs. 90 lakhs paid to an Indian party towards Annual licence fee for renewal of Microsoft software licence. AO treated the said payment to be in the nature of Royalty and disallowed deduction for want of TDS.Held: Legislature by way of insertion of Expln. 4 read with Expln. 2 to section 9(1)(vi) has made it clear beyond an iota of doubt that consideration for use or right to use computer software in any form, including mere granting of licence, would be considered under the Act as income from royalty in the hands of recipient and the amendment being declaratory in nature was applicable during the year under consideration. Accordingly, AO was justified in making disallowance for want of TDS.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2009-10


INCOME TAX ACT, 1961

Section 115JB

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