The Tax Publishers021 TaxPub(DT) 4023 (Bang-Trib) Qliktech International AB v. Dy. CIT In Favour of Assessee, Bang-Trib, IT(IT)A No. 173/Bang/2021, 06-Jul-2021

INCOME TAX ACT, 1961

Section 90 Section 9(1)(vi)

Payments for computer software sold/licenced on a CD/other physical media could not be classed as a royalty under section 9(1)(vi) as well as article 12 of India-Sweden DTAA.

Double taxation relief - Agreement between India and Sweden - Royalty under article 12 - Income on account of delivery of software to its clients in India

Assessee based at Sweden earned income on account of delivery of software to its clients in India through its resellers. AO taxed amount received by assessee as royalty.Held: Sale of software products by assessee to its Indian distributors for further sale to end users was not in the nature of transfer of 'copyright'. The end-user only got the right to use computer software under a non-exclusive licence, ensuring the owner continued, i.e., assessee to retain ownership under section 14(b) of the Copyright Act read with sub-section 14(a)(i) to (vii), and, therefore, payments for computer software sold/licenced on a CD/other physical media could not be classed as a royalty under section 9(1)(vi) as well as article 12 of India-Sweden DTAA.

Applied:Engineering Analysis Centre of Excellence (P) Ltd. [(2021) 125 Taxmann.com 42 (SC) : 2021 TaxPub(DT) 1208 (SC)].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2017-18


INCOME TX ACT, 1961

Section 9(1)(vii) Section 90

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