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| The Tax Publishers2019 TaxPub(DT) 1672 (Mum-Trib) INCOME TAX ACT, 1961
Section 90
Software supplied by assessee based at Israel was a copyrighted article and not a copyright right, and payment received by assessee in respect of software could not therefore, be considered as royalty either under the IT Act or in terms of article 12 of Indo-Israel DTAA and since assessee was not having PE in India, there could be no taxability here
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Double taxation relief - Agreement between India and Israel - Royalty under article 12 - Payment towards supply of software
Assessee based at Israel supplied software to Indian entity. AO treated related payment received by the assessee as royalty taxable in India.Held: In terms of Article 12 of Indo-Israel DTAA royalty means 'payments of any kind received as a consideration for use of, or right to use, any copyright of literary, artistic or scientific work. Software supplied by assessee based at Israel was a copyrighted article and not a copyright right, and payment received by assessee in respect of software could not, therefore, be considered as royalty either under the IT Act or DTAA and since assessee was not having PE in India, there could be no taxability here.
Relied:Motorola Inc. v. Dy. CIT 2005 TaxPub(DT) 1677 (Del-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
IN THE ITAT, MUMBAI BENCH
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