INCOME TAX ACT, 1961

Section 9(1)(vi)

Income deemed to accrue or arise in India - Royalty receipts - Payment towards icensing of software products -

Revenue submitted that ITAT had erred in holding that licensing of software products of Microsoft in the Territory of India by assessee was not taxable in India as Royalty under section 9(1)(vi) read with Article 12 of the Indo-US DTAA. He stated that the Tribunal had failed to appreciate that distribution model in the case of assessee involved making multiple copies of the software clearly indicating transfer of copyright. Held: This Court finds that issue raised in the present appeal was no longer res integra as the Supreme Court in Engineering Analysis Centre of Excellence Private Limited v. Commissioner of Income Tax & Anr. (2021) SCC OnLine SC 159 had held that licensing of software products in the Territory of India by assessee was not taxable in India as Royalty under section 9(1)(vi). Issue of law raised in present appeal was conclusively decided in the favour of the assessee by Supreme Court, no substantial question of law arises for consideration in the present appeal. Revenue had admitted before ITAT that dispute in question was decided in favour of the assessee by Tribunal in earlier years.

Followed:Engineering Analysis Centre of Excellence (P) Ltd. v. CIT & Anr. 2021 TaxPub(DT) 1208 (SC), CIT v. Gracemac Corporation [ 32/2022 and ITA 34/2022 & C.M.No.11370/2022, dt. 7-3-2022], Ey Global Services Ltd. v. Asstt. CIT & Anr. [W.P.(C) 11957/2016] : 2022 TaxPub(DT) 101 (Del-HC) and Citrix Systems Asia Pacific Pty. Ltd., In re (2012) 343 ITR 1 (AAR) : 2012 TaxPub(DT) 1651 (AAR).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2006-07

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