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| The Tax Publishers2020 TaxPub(DT) 2212 (Del-Trib) INCOME TAX ACT, 1961
Section 195
Payment made to overses AE in terms of intra-group supplier agreement for purchase of computer software licenses could not be treated as royalty liable for TDS as software was re-sold to the assessee without additional services and without any markup there was no transfer of any right in respect of copy right and it was a case of mere transfer of a copy righted article.
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Tax Deduction at source - Under section 195 - Payment to non-resident - Royalty--Payment towards purchase of computer software licence
Assessee claimed deduction of payments made to Steria France for purchase of computer software licences. AO held the payment to be in the natutre of royalty and accordingly, disallowed deduction for want of TDS.Held: As evident from Intra-Group Supplier Agreement entered into between Steria France and assessee hardware and software purchases by Steria France was re-sold to the assessee without additional services and without any markup. Thus, there was no transfer of any right in respect of copy right and it was a case of mere transfer of a copy righted article. The payment represented only purchase price of license or a copy righted article and the same cannot be considered as royalty either under the Act or under the provisions of DTAA. Accordingly, no TDS was called for under section 195.
Distinguished:CIT v. Samsung Electronics Co. Ltd. & Ors. (2011) 345 ITR 494 (Karn) : 2011 TaxPub(DT) 2175 (Karn-HC) and DIT v. Infrasoft Ltd. (2014) 220 Taxman 273 (Del) : 2014 TaxPub(DT) 0079 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 92C
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