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| The Tax Publishers2020 TaxPub(DT) 5226 (Del-HC) : (2021) 431 ITR 0136 INCOME TAX ACT, 1961
Section 9(1)(vi)
Receipt of income from the sale of software products in India by assessee company incorporated in UK could not be considered as royalty in view of decision rendered in various judicial pronouncements.
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Income deemed to accrue or arise in India - Under section 9(1)(vi) - Sale of software products in India, whether constitutes royalty -
Assessee was a company incorporated in UK and was engaged in selling software products in India, either through its distributors or directly to customers. AO held that the receipt of income from the sale of software products in India was taxable under the head 'Royalty' as per provisions of section 9(1)(vi) read with article 13 of the India-UK DTAA. Held: Tribunal had decided the appeals in favour of the assessee on the basis of the decision rendered in the case of Pr. CIT v. M. Tech India Pvt. Ltd. [(2016) 287 CTR (Del) 213 : 2016 TaxPub(DT) 828 (Del-HC)] wherein the Court relying upon the earlier decisions on the same issue including the judgment of this Court in Director of Income Tax v. Infrasoft Ltd. [(2014) 264 CTR (Del) 329 : 2014 TaxPub(DT) 79 (Del-HC)] and inter alia held that payment made by the reseller for the purchase of software for sale in Indian market could not be considered as royalty. Following the same, the issue was decided in favour of assessee.
Followed:Pr. CIT v. M. Tech India Pvt. Ltd. [(2016) 287 CTR (Del) 213 : 2016 TaxPub(DT) 828 (Del-HC)] and Director of Income Tax v. Infrasoft Ltd. [(2014) 264 CTR (Del) 329 : 2014 TaxPub(DT) 79 (Del-HC)]
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2013-14
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