The Tax Publishers021 TaxPub(DT) 4839 (Bang-Trib) Quest Software International Ltd. v. Dy. CIT (International Taxation) In Favour of Assessee, Bang-Trib, IT(IT)A No. 2531/Bang/2019, 27-Jul-2021

INCOME TAX ACT, 1961

Section 9(1)(vi)

Where revenue alleged that payment received by the assessee-company would constitute royalty within the meaning of Article 12(3) of the DTAA and as per the provisions of section 9(1)(vi), considering fact that case of assessee was squarely covered in its favour by judgment of Apex Court in case of Engineering Analysis Centre of Excellence P. Ltd. v. CIT, it was held that payment received by the assessee-company would not constitute royalty and could not be brought to tax.

Income deemed to accrue or arise in India - Chargeability - Income from sale of off-the-shelf software, whether is to be treated as royalty -

Assessee challenged draft assessment order passed, wherein it was concluded that payment received by the assessee-company would constitute royalty within the meaning of Article 12(3) of the DTAA and as per the provisions of section 9(1)(vi). Objections raised by assessee to Dispute Resolution Panel (DRP) were also rejected. Held: Issue in question was squarely covered in favour of the assessee by judgment of Apex Court in case of Engineering Analysis Centre of Excellence P. Ltd. v. CIT & Anr. (2021) 432 ITR 471 (SC) : 2021 TaxPub(DT) 1208 (SC). Revenue was not able to controvert the submissions made by assessee. In view of the judgment of the Apex Court, which was identical to the facts of instant case, the payment received by the assessee-company would not constitute royalty and could not be brought to tax.

Followed:Engineering Analysis Centre of Excellence Private Ltd. v. CIT & Anr. (2021) 432 ITR 471 (SC) : 2021 TaxPub(DT) 1208 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



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