The Tax Publishers2021 TaxPub(DT) 1906 (Mad-HC)

INCOME TAX ACT 1961

Section 40(a)(ia)

Following the ratio laid down by Supreme Court in Engineering Analysis Centre of Excellence Private Limited [2021 SCC OnLine SC 159 : 2021 TaxPub(DT) 1208 (SC)], assessee was not laible to deduct tax on source on payment made to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements.

Business disallowance under section 40(a)(ia) - Payment to Non-resident Computer software manufacturers/suppliers - Non deduction of tax at source -

Assessee made payment to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements. AO made disallowance under section 40(a)(ia) for non-deduction of tax at source as he was of the view that payment made was on account of royalty which was taxable as per provision of section 9(1)(vi). Held: Following the ratio laid down by Supreme Court in the Engineering Analysis Centre of Excellence Private Limited [2021 SCC OnLine SC 159 : 2021 TaxPub(DT) 1208 (SC)], the questions of law was decided against the revenue and in favour of the assessee.

Followed:Engineering Analysis Centre of Excellence Private Limited [2021 SCC OnLine SC 159 : 2021 TaxPub(DT) 1208 (SC)].

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2008-09



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